Banks
	 — 
	Question

Lord Renton of Mount Harry: To ask Her Majesty's Government what further measures they propose to take to restore confidence in British-based banks.

Lord Myners: The Government's interventions to stabilise the financial system have been decisive in restoring confidence in the banking sector. To underpin this improvement in confidence, regulatory reform is also necessary. The Government, in conjunction with the FSA and the Bank of England, have already made progress in improving financial institutions' corporate governance, remuneration practices and risk management, and are working with international partners significantly to strengthen capital and liquidity requirements.

Lord Renton of Mount Harry: My Lords, I thank the noble Lord for his interesting Answer. I greatly appreciate the time that he has spent in recent days on this very important issue, but-there always has to be a "but"-does he agree that there is a strong sense of frustration that, after 18 months of talk, nothing has really changed? Goldman Sachs is back making huge profits and is having difficulty restraining its bonuses from being too large. I have two quick points on this very difficult issue. Will the noble Lord follow up the proposition that there must be a fundamental divorce between retail deposit banking and what is politely called investment banking, but in fact has often simply meant taking large and obscure risks in derivatives whose profit was based on the growth in house prices? Secondly, will the Minister persuade his colleagues to declare, as President Obama has done, that never again will the British taxpayer be held to ransom by a bank that is too big to fail?

Lord Myners: I thank the noble Lord very much. The answer to his first question is no, and to the second yes.

Lord Lea of Crondall: Does my noble friend agree that what would really restore confidence among the public at large, not least those who have lost their jobs as a result of the bankers' ramp, would be to make positive use of taxpayers' money to create jobs and to ensure that the investment banks, from Goldman Sachs downwards, are part of that? The public at large will no longer put up with the national scandal of banks paying themselves billions of pounds of money which is not theirs.

Lord Myners: I thank my noble friend for his question. The support we have given to the banking system is evident in the fact that the economy is now coming out of recession and has done so with much less damage in terms of unemployment, business failure or people losing their homes than was the case in previous Tory recessions. The support we have provided to the banking system has undoubtedly helped to support the extension of credit to achieve that goal. We continue to use the pressures of the FSA, other legislation and international engagement to bear down on bonus costs in banks, but ultimately these questions must be determined by the shareholders of those banks.

Lord Newby: My Lords, does the Minister agree that one of the best ways to restore trust in the banking sector is to split off the more risky elements of banking from the more utility functions? Has not President Obama shown how that might be done? Why will the Government now not follow suit?

Lord Myners: The observation made by the noble Lord does not accord with the facts. The failures that we have seen in the banking system have not come through the co-joining of utility banks and investment or casino banks. Lehman Brothers and Bear Stearns were pure investment banks. Freddie Mac, Fannie Mae, IndyMac, Northern Rock and Bradford & Bingley were pure retail banks. It is not the conflation of the two that was the source of the error. I have spent a lot of time looking at this and I have concluded that the answers lie not in architecture but in behaviour. The reason why these banks failed was because they were atrociously managed.

Lord Lawson of Blaby: My Lords, that may well be the case, but is the noble Lord not aware that the risk taking was an integral part of the atrocious management and it was risk taking on the knowledge that the taxpayer would bail them out. Are not my noble friend Lord Renton, the noble Lord, Lord Newby, and Mr Paul Volcker, who knows a great deal about this, more likely to be right than the Minister?

Lord Myners: I do not think so. It is a very challenging question that the noble Lord, Lord Lawson, puts to me. When I say atrociously managed I mean atrocious management of risk as that is what lies at the heart of banks. It was the failure through traditional bad lending that lay at the heart of the collapse of the Bank of Scotland, part of HBOS, and of Royal Bank of Scotland.
	We will have to see the detail of President Obama's proposals. They lack detail at the moment but there is nothing in them that we see which accords with continuing concerns we have about the UK banking system. Proprietary trading, hedge funds and private equity were not at the heart of the problems that were faced by the UK banking industry. These are complex issues, as the volte-face of George Osborne over a matter of a few hours on Thursday night and Friday morning evidenced.

Lord Barnett: My Lords-

Baroness Noakes: My Lords-

Lord Davies of Oldham: It is this side's turn.

Lord Barnett: My Lords is not the real reason for any loss of confidence the appalling judgment of the bankers-who are still there-on lending? There is no guarantee that they will not still be there on any changes that will be made later. May I clarify my noble friend's policy on this? Unlike the President of the United States, is he saying that because those bankers are still going to be there, whether they are running small or large banks, the only way to get round the problem is by having some kind of compulsory insurance fund so that it cannot happen again and taxpayers and others are protected?

Lord Myners: The truth is that the senior management of Royal Bank of Scotland and HBOS has changed almost entirely since the failures so there has been a complete re-engineering of leadership with new people brought in from other more successful organisations. It is axiomatic that a failed bank must see the shareholders suffer and the management must be removed. That is what we have done in the case of failed banks.
	As for levies, as the House is no doubt aware, I chaired a meeting in Downing Street yesterday which looked at contingent capital and risk-based systemic levies in order to assist the world banking system become more resilient and to feed into the work of the IMF and the G20 when they meet later in the year.

Baroness Noakes: My Lords, the Question of my noble friend Lord Renton was about confidence. Can the Minister not accept that what the Government have done so far has failed to restore confidence in UK banks? Why is the Minister so stubbornly refusing to accept that President Obama's solution could add to that? Does he not agree with the Governor of the Bank of England who told the Treasury Select Committee in another place this morning that structural reform is needed?

Lord Myners: Again, I wonder where the noble Baroness gets her information from, because the share prices of our major banks have in some cases quadrupled since their low point. That is a real sign of improved confidence, as are lower interest rates, a lower OIS spread, the fact that a bank such as Lloyds Banking Group can launch the largest-ever rights issue in this country, and the decline in the credit default swap rates. This is real evidence of returning confidence. I could go on for much longer; I shall not, but I can assure the noble Baroness that if she wants to ask fact-based questions we will have a better dialogue.

Unemployment
	 — 
	Question

Lord Roberts of Conwy: To ask Her Majesty's Government what is the latest quarterly figure for total unemployment in the United Kingdom; and what is the latest monthly total number of claimants of unemployment benefit.

Lord McKenzie of Luton: My Lords, in the quarter to November 2009, 2.46 million people were ILO unemployed, which is down 7,000 on the quarter. In December 2009, 1,606,500 people were claiming jobseeker's allowance, which is down 15,000 on the month.

Lord Roberts of Conwy: My Lords, the falls in the total and claimant figures are a welcome relief-temporary though they may be. Does the noble Lord agree that there is still real cause for concern about the fall in the employment rate to 72.4 per cent, the lowest since the winter of 1996-97, and the increase to November 1997 levels in the number of those unemployed for more than 12 months? Does the noble Lord agree that today's announcement of 0.1 per cent growth in the last quarter of last year hardly holds out much hope to the record number of 8 million economically inactive people in this country?

Lord McKenzie of Luton: My Lords, there was a host of questions in there. As regards today's news on the economy, the Chancellor has always said that it would return to growth by the end of the year. The estimate makes clear that the Government are right to be confident but cautious about the prospects for the economy. There are now clear signs that the impact of the recession on the labour market is easing. The level of redundancies has fallen significantly since the spring. As regards jobseeker's allowance, the December on-flow figure of 328,000 was the lowest for a year, but more than 350,000 people left JSA, which is the highest figure for 15 years. On the inactivity figures, I suggest that you need to unpick the raw data, because you need to take account of the fact that the population has increased. If you extract the number of full-time students in that data, you will see that the proportion of the working-age population that is inactive is actually 2.3 per cent lower even than in 1997, let alone previous Tory recessions.

Lord Oakeshott of Seagrove Bay: My Lords, I should like to ask a fact-based question, if the noble Lord, Lord Myners, would allow me to; 1,034,000 people have been made redundant over the past year, an increase of a third over the previous year. How many of them have been able to find new full-time jobs?

Lord McKenzie of Luton: My Lords, the latest figure of 182,000 redundancies for the quarter is down on the previous quarter and is certainly down on the peak during spring 2009. The noble Lord is correct to raise issues around full-time and part-time employment. If the import of his question is that there has been an increase in part-time employment, he is right. However, just under 14 per cent of the total are looking for full-time, rather than part-time, employment.

Baroness Wall of New Barnet: My Lords, does my noble friend agree that the investment in skills that this Government have made over the past two or three years has made a big difference to the unemployment figures, and has most definitely made a difference when comparing redundancy figures and the number of people being placed in other jobs?

Lord McKenzie of Luton: My Lords, yes, I very much agree with my noble friend and it allows me the opportunity to remind noble Lords of the announcement yesterday that from 25 January every young person who is unemployed for six months will be guaranteed the offer of a job, training or work experience, supported by up to 470,000 opportunities over the next 15 months through the Government's young person's guarantee.

The Lord Bishop of Manchester: My Lords, during the past half century the north-west had some particularly high levels of unemployment. Given that the Manchester city region is currently the strongest economic engine outside London, is that reflected in the regional breakdown of the current figures, or does employment in the north-west remain disproportionately high?

Lord McKenzie of Luton: My Lords, I think it is right to say that the impact of the recession has been felt across the UK. I was trying to seek the regional breakdown of the data, which I have, and it might be easier if I write to the right reverend Prelate specifically on that. The key point, however, is that action the Government have taken through local employment partnerships, through Backing Young Britain, through the jobs guarantee, impacts across our country and is not just concentrated in certain areas.

Lord Freud: My Lords, will the Minister, provide us with the Government's projections for ILO unemployment when it peaks, as we hope, in 2010? He has acknowledged that the convention not to provide these figures ended last autumn.

Lord McKenzie of Luton: My Lords, I would refer the noble Lord to the Statement made on the Pre-Budget Report, where for purposes of openness the Government set out projections of the claimant count over the next few years, consistent with the other projections that were made in the PBR. I would refer him to that document. If memory serves, I think it showed the claimant count peaking at 1.75 million but the projections made by outside commentators in current times have been way over the out-turn.

Lord Kilclooney: My Lords-

Lord Davies of Oldham: My Lords, I am sorry, we must move on.

Redundancy Payments Order
	 — 
	Question

Tabled By Baroness Gardner of Parkes
	To ask Her Majesty's Government what is the cause of the delay in adding the Traffic Director for London, abolished by the Greater London Authority Act 1999, to the list of bodies covered by the Redundancy Payments (Continuity of Employment in Local Government, etc.) (Modification) Order 1999 (SI 1999/2277).

Baroness Gardner of Parkes: My Lords, I beg leave to ask the Question standing in my name on the Order Paper on this Australia Day.

Lord McKenzie of Luton: My Lords, responsibility for the redundancy payments modification order was formally transferred from the Department for Business, Innovation and Skills to Communities and Local Government in November 2009. Officials are considering the content of an amending order and I can confirm that the former Traffic Director for London will be one of a number of bodies or organisations to be included in a statutory instrument that CLG aims to make in the spring.

Baroness Gardner of Parkes: I thank the Minister for that half-encouraging answer. Will he say why it has taken so long, passing from department to department over all these years, and can he promise that the order will be laid before the general election?

Lord McKenzie of Luton: My Lords, I cannot promise the latter because I do not know when the election is to be. The reason why the Traffic Director for London was not included in the original 1999 order is, I am afraid, shrouded in a bit of mystery and it seems to have been overlooked when subsequent orders were made, both in 2001 and in 2004. There is now a clear commitment to make sure that it is included and the proposal is for the order to be laid in spring. Timing is not very precise, but it is anticipated that it would be in late March or early April.

Lord Tope: My Lords, one of the principal concerns of the Traffic Director for London when he was in post was congestion in London caused by roadworks, which Transport for London now estimates cause 37 per cent of disruption to traffic in London. The Minister will be aware that the Mayor of London has recently adopted Liberal Democrat proposals to charge utility companies. Can he say what more central government can do to get London moving?

Lord McKenzie of Luton: My Lords, I cannot off the top of my head, as it is way outside the Question.

Lord Bates: My Lords, I will have another try. When the Traffic Director for London arrives, could he be invited to undertake a review of the PPG13 planning guidance from the Minister's department, which requires councils to increase parking charges and reduce the number of parking spaces? Will the Minister confirm that his noble friend the Secretary of State for Transport, in a Written Answer on 7 December 2009, said that government chauffeurs had incurred £17,000 in parking fines last year? He added that parking restrictions in London make it impossible to avoid fines. Is this not precisely what councils and businesses have been telling the Minister and will he now act to review this damaging measure?

Lord McKenzie of Luton: My Lords, I say to the noble Lord that his understanding of the Traffic Director for London seems to be profound. The Traffic Director for London was set up as a corporate sole in 1991. It ceased to exist about eight years ago. Some of the individuals who were employed by the Traffic Director for London-it was not a post but an organisation-have gone back to local councils. That is what this order and issue are all about. Therefore, it no longer exists as a body and has no responsibility for the areas that the noble Lord is probing.

Baroness Gardner of Parkes: The Minister's answer to the last supplementary question was helpful. Is it clear to him and to the House that the Traffic Director for London was not just one person but something called a "corporate sole"? I understand that the Clerk of the Parliaments is a corporate sole, which is both an individual and a body of people. The number of staff members working for the Traffic Director for London whose rights might have been affected by this if they had been made redundant was 26.

Lord McKenzie of Luton: The noble Baroness is absolutely correct. The inclusion of the Traffic Director for London in the next amending order means that all the staff members will be protected should they be made redundant at any stage in the future.

Lord Brooke of Sutton Mandeville: My Lords, in the light of an earlier answer, do the Government maintain a best estimate of how many other things lost in antiquity and the mists of time may suddenly rise up to surprise them?

Lord McKenzie of Luton: No, my Lords, if we knew what was missing, we would be able to deal with it.

Terrorism: Stop and Search
	 — 
	Question

Baroness Howells of St Davids: To ask Her Majesty's Government what are their plans for adhering to the ruling of the European Court of Human Rights on the police's power to stop and search under the Terrorism Act 2000.

Baroness Scotland of Asthal: My Lords, the decision of the European Court of Human Rights is not final. The United Kingdom courts have found the exercise of the powers pursuant to Section 44 of the Terrorism Act 2000 to be ECHR-compatible. That is a view with which the Government concur. The Home Secretary is giving careful consideration to the judgment and will request a referral to the Grand Chamber.

Baroness Howells of St Davids: I thank my noble and learned friend for her very interesting reply, but I am sure that she is aware that the removal from the statute book of the outdated Vagrancy Act was the result of the adverse effect that it had on young black males, some as young as seven. It caused a great problem to this country. In reintroducing the measure under Section 44 of the Terrorism Act, the Government gave some interesting reasons. Perhaps my noble and learned friend can tell the House whether any of those reasons have been satisfied. Could she say how many acts of terrorism and criminal activity have been thwarted in the past 12 months by the Act and whether it has reassured the public?

Baroness Scotland of Asthal: My Lords, I do not have the precise figures for the number of acts of terrorism or criminal activity. Noble Lords will know that part of the reason why stop and search was used was to act as a deterrent. It has been an effective tool and it has been honed. I say to my noble friend that the criticisms made by the community about Section 44 and the way in which it was operated have been taken very seriously. As a result of the work done with the community and the Metropolitan Police, which has responded to the community's concern, from mid-2009 we have seen a drop in its use in the capital of about 40 per cent.

Baroness Neville-Jones: My Lords, the Metropolitan Police has already reviewed the use of Section 44 powers and now is deploying them only at pre-identified significant locations when specific operations have been agreed for specific areas. If that is the case, rather than appealing, why do the Government not amend the Terrorism Act immediately to reflect that change in the use of the powers?

Baroness Scotland of Asthal: My Lords, the noble Baroness is quite right about the more targeted use to which the power has been put. I am sure that she will have seen the erudite judgment made by the House of Lords about the structure of Section 44 and the way in which it can be used proportionately. What she has described is the proportionate and appropriate use of the law as it currently stands. As I said, my right honourable friend the Home Secretary is looking at the judgment carefully and considering whether to refer this matter to the Grand Chamber. We shall have to await the outcome.

Lord Lloyd of Berwick: My Lords, Section 44 of the Terrorism Act was intended to deal with exceptional situations. Does the decision of the European Court of Human Rights not underline the ever present danger of allowing the exceptional to become normal and a matter of everyday practice?

Baroness Scotland of Asthal: My Lords, I understand what the noble and learned Lord says, but the tragedy for our country is that, at the moment, we live in exceptional times. To be under severe threat from terror is the exception and I hope that we in this country never get to the stage when we accept it as the norm. To respond to those exceptional circumstances, we have to make exceptional effort to defeat the terrorists, which is what we are doing.

Lord Mackenzie of Framwellgate: My Lords, does my noble and learned friend agree that most members of the British public, provided that they are dealt with reasonably, courteously and fairly, are quite prepared to give up a little bit of liberty in the interests of fighting the scourge of terrorism?

Baroness Scotland of Asthal: My Lords, I can certainly assure my noble friend that I have found that the normal, good people in this country understand absolutely the threat with which they are faced. They are responding with remarkable British phlegm and courage and helping to make sure that we stay as safe as we possibly can.

Baroness Hamwee: My Lords, perhaps I should declare an interest as a normal, good person who has been stopped and searched; the Security Minister, too, is a normal, good person who has been stopped and searched. The Secretary of State has a role in confirming authorisations. Can the noble and learned Baroness tell us, of course without disclosing any operational or secure information, what criteria the Secretary of State uses?

Baroness Scotland of Asthal: My Lords, the police will do an assessment, identifying the risks that are posed and setting out the reasons why they believe that a particular site needs to be subject to protection. A detailed report will be made and then there will be a decision about whether there should be an affirmation of the order.

Lord Campbell of Alloway: My Lords, I thank the noble and learned Baroness for her exposition of the true position in this country under the decisions of the Strasbourg court. We retain in our Supreme Court the right to make our own decisions, a matter that was not referred to in yesterday's debate.

Baroness Scotland of Asthal: My Lords, the noble Lord is absolutely right. The Supreme Court retains the right and the duty to express itself on our law. It has done so cogently and well. Of course it is similarly the right of the European Court of Human Rights to express what it thinks the position is and the Grand Chamber usually has the final say.

Lord Pannick: My Lords, will the noble and learned Baroness confirm that what concerned the European Court of Human Rights were the absence of any guidance as to when an authorisation could be issued and the absence of any guidance to individual police officers as to when they should consider exercising these powers? Would it not be better for the Government, rather than appealing to the Grand Chamber, to concentrate on bringing forward proposals to remedy these undoubted defects in our law?

Baroness Scotland of Asthal: My Lords, there is an issue as to whether the European Court of Human Rights understood the impact of the guidance that is provided under PACE and otherwise. The noble Lord will know that the Supreme Court identified the guidance and the support that enabled it to come to the conclusion that the powers were compatible. The European Court took a different view. That is quite an interesting difference.

Lord Tyler: My Lords, in declaring an interest that my son is a freelance photographer, may I ask the Attorney-General whether she is satisfied that the behaviour of the police in relation to both professional photographers and tourists who are taking photographs, particularly around London, is in accordance with the stop and search powers that they have at their disposal?

Baroness Scotland of Asthal: My Lords, guidance has been provided that, if used correctly, makes sure that those powers are proportionately and appropriately used. There is always a question, of course, as to whether good guidance is followed on every occasion.

Lord Scott of Foscote: My Lords-

Lord Davies of Oldham: I am sorry, my Lords, but our time is up.

European Union Committee
	 — 
	Membership Motion

Moved By The Chairman of Committees
	That Lord Carter of Coles be appointed a member of the Select Committee in place of Baroness Symons of Vernham Dean, resigned.

Lord Teverson: My Lords, would the Chairman of Committees say how this leaves the gender balance on the European Union Committee?

Lord Brabazon of Tara: That is a question that I am afraid I cannot answer without notice.
	Motion agreed.

Marriage (Wales) Bill [HL]

Bill Main Page
	Copy of the Bill

Third Reading

Bill passed and sent to the Commons.

Digital Economy Bill [HL]

Bill Main Page
	Copy of the Bill
	Explanatory Notes
	Amendments
	2nd Report from the Delegated Powers Committee
	4th Report from the Delegated Powers Committee
	Committee (5th Day)
	3.08 pm
	Clause 10: Obligations to limit internet access: assessment and preparation
	Amendment 157
	 Moved by Lord Clement-Jones
	157: Clause 10, page 13, line 6, after "(1)" insert "must"

Lord Clement-Jones: My Lords, I am moving Amendment 157 in the absence of my noble friend Lady Miller, whom I was hoping would return to these Benches. I do so without a particular brief, while Members of the House disperse in good order, and as slowly as I possibly can. This is to allow some debate to be had on this amendment in the name of my noble friend, which of course is on a matter of considerable importance. I know that the Minister will give a full reply. I beg to move.

Lord Lucas: The noble Lord need not have worried; I am capable of carrying on at considerable length, although, in the hope that we may make some progress with the Bill today, I shall try to keep it relatively short.
	The first two amendments are, to my mind, quite clear in their intent: that is to make sure that the three options that the Government have given themselves actually happen. I cannot see any circumstances in which it would be desirable for any of the events in paragraphs (a), (b) and (c) of subsection (4) not to take place, so the purpose of Amendments 157 and 158 is to ensure that they do.
	I will speak also to Amendment 160. The intention there is to ensure that people who are representative of subscribers are consulted too. All that is presently proposed is that they are a possible group of consultees. Those, who, at the end of the day, will bear the impact of the Bill and the sanctions under this part of it, should be consulted ahead of, and certainly as well as, those who are merely conduits for the punishment which the Government intend.

Lord Howard of Rising: We on these Benches agree with the amendments concerning paragraphs (a) and (b). It would be quite wrong to proceed with an assessment of a technical measure without consultation on an assessment or how effective it would be. I must admit that I do not understand why paragraph (c) is there at all. The power to take initial steps is already in subsection (1), so it is not clear why it needs to be repeated in subsection (4).
	Turning to the amendments of the noble Lord, Lord Whitty, and my noble friend Lord Lucas, we on these Benches agree with a requirement to consult groups representing subscribers and consumers. However, I am unclear on the value of consulting the judiciary. I worry about the provisions becoming a pseudo-penalty, which certainly would require the involvement of the judiciary. However, there would be an appeal, so presumably the body administering the code will be able to handle complaints about wrongful imposition of measures up to a certain point. The measures should not be used to punish. If the noble Lord intends the provisions to allow the imposition of a penalty, or the withdrawal of a service to such an extent that it would be seen as one under the law, the Government need to go back to square one and draft in the proper protections that such a step would require.

The Earl of Erroll: My Lords, I can see the purpose of the amendments; we should use "must" rather than "may", because we must consult everyone and leaving too much to discretion can be dangerous. Sadly, the noble Lord, Lord Whitty, does not appear to be here. I can see a possible point in consulting the judiciary, despite what the noble Lord just said, because copyright law is extremely complex, and it could well be that inadvertently the code is not realistic in terms of the actual law of copyright, particularly when we are dealing with it internationally. Some people who are serving up files for unlawful download will be using foreign-based servers within areas which come under the Berne convention. There may be a legal level to this which should be consulted. To ignore that could be unwise, so I can see good purpose in that. In general, I support the amendments; they are eminently sensible.

Lord Young of Norwood Green: My Lords, Clause 10 allows the Secretary of State to require Ofcom to prepare in advance against the need for technical obligations, to require Ofcom to assess the need for technical obligations generally and the likely efficacy of particular technical obligations on particular types of networks, and to require Ofcom to develop a code of practice to underpin any such technical obligations.
	It may well be desirable for those powers to be used one at a time rather than in parallel. The Secretary of State might want an assessment of whether any measure is needed and, if so, which is the right one before asking for a code to be drawn up. This would make sense since the detail of the code is likely to be heavily influenced by the nature of the measure. This suggests that it is not sensible to make all of paragraphs (a) to (c) a requirement in relation to every direction that the Secretary of State might make under new subsection (1) of new Section 124G of the Communications Act 2003 in Clause 10.
	Imposing technical obligations is something a Secretary of State would decide only if he were sure it was the only way to deal with the problem of online copyright infringement and if the initial obligations have failed to deliver the expected results. I stress that because we are all committed to ensuring that the initial obligations have an opportunity to deliver the expected results before we think about technical measures. An assessment of whether technical obligations should be imposed will be informed by consultation of relevant groups, including consumers-there is an explicit assurance on that-which in this context includes subscribers. The noble Lord, Lord Lucas, for example, expressed concern about that. Adding the phrase "consumer groups" does not add anything.
	The amendment also calls for the addition of "the judiciary" to the list of those to be consulted. Such a statutory obligation would be highly unusual and is unnecessary. I share the view of the noble Lord, Lord Howard of Rising, that it is also undesirable in this context.
	Finally, on Amendment 160, I explained in relation to the previous amendment why I think this is unnecessary. I accept entirely the need for consultation with consumers and consumer groups before any technical obligations are imposed, but the Bill already provides for that. I think it was the noble Lord, Lord Howard, who asked why we need paragraph (c). We believe that paragraph 4 provides the necessary detail.
	I hope in the light of this explanation, the noble Lord will agree to withdraw the amendment.

Lord Clement-Jones: That was a very interesting response and no doubt we will give it due mature consideration. In the mean time, on behalf of my noble friend, I beg leave to withdraw the amendment.
	Amendment 157 withdrawn.
	Amendments 158 to 160 not moved.
	Amendment 161
	 Moved by Lord Lucas
	161: Clause 10, page 13, line 10, after "likely" insert "proportionality, objective justification and"

Lord Lucas: I shall speak to Amendment 166 as well. Amendment 161 tries to beef up paragraph (b). It looks at not just the efficacy of the technical measure-in other words whether it will bite-but also the proportionality and objective justification for it. It introduces something of the subscriber's point of view as well as considering the copyright owner's point of view that is in the current wording, to make sure that we are treating our citizens in a justified way. That is echoed in Amendment 166, which asks us to make sure that,
	"measures that OFCOM recommends are compatible with the Human Rights Act 1998, show due respect for the principle of presumption of innocence and the right to privacy, and guarantee a prior fair and impartial procedure".
	We have been over this track a bit and I hope that each time we revisit it we get closer to understanding what will really happen. I had a very helpful letter this morning from ACS:Law Solicitors which, combined with what the Ministers were saying on the last occasion we discussed this, leads me to a greater understanding of their reluctance to deal with the practices that ACS:Law Solicitors is pursuing. They expect these practices to become standard. They expect this to be the way that our citizens will be treated. If people fall foul of this Bill, they will have a couple of warning letters, but after that they will get a typical ACS:Law Solicitors standard letter saying, "Pay us £500 or we will take you to court". If they do not pay the £500, they will end up in court, there will be technical evidence against them, and they will have no ability to provide a technical defence. That is the difficulty that people faced with ACS:Law Solicitors have at the moment. There is this inequality of arms. They are in a civil court, with a 50:50 balance-of-probability judgment, and must contemplate risking thousands of pounds in mounting a defence when it is not easy to do that.
	We should think extremely carefully before we make it acceptable for mainstream copyright owners to pursue this sort of course because we have talked it through carefully and have sanctioned it in the Bill. This is not a comfortable or pleasant procedure for people. Thousands of people feel that they have been done in by ACS:Law Solicitors. They have been unjustly accused and are finding it extremely difficult to satisfy ACS:Law Solicitors that they are innocent. These things rarely seem to come to court. None the less, the process appears to be entirely within the recognised arrangements of the law, and there is as yet no sanction or judgment against the practice from the SRA or any other organisation. We must accept that tens of thousands of citizens are going through this experience at the moment, and that hundreds of thousands or a million or more citizens will do so once the Bill is passed. This is producing extreme worry and unhappiness because of the lack of ease in dealing with it.
	As the Bill goes through Parliament, we really must decide what is proportionate and reasonable and how we balance the interests of copyright owners with our duty to our citizens to ensure that they are not put in fear and made to worry over something that they find extremely difficult to comprehend or defend themselves against. They have a deep feeling that they have been wronged because they know that they have not done what they are accused of.
	The Government have not got the balance right, and the amendments suggest how we might start to tackle this. Somewhere in the Bill there must be a real understanding of the need for balance between copyright owners and citizens and that this is not a matter of heinous and absolute liability, such as sticking a knife into a person. This can be done unawares and can be extremely difficult to tackle in court. I beg to move.

Lord Clement-Jones: The noble Lord, Lord Lucas, has made some very important points. We debated this at some length on the previous day in Committee, but I should point out to the Minister that, having put various statements on the record on that day, I was inundated with correspondence. The impression was that the Solicitors Regulation Authority had received no complaints about the activities of ACS:Law Solicitors, and, it now transpires, of Davenport Lyons. In fact, there has been a torrent of complaints to the SRA, and I sent the Minister an e-mail, which I hope he has received, setting out at some length the material that I have received.
	This is clearly a matter of great importance. Just as the noble Lord, Lord Lucas, has said, some of these firms are using some extremely unjustified and unpleasant ways against perfectly innocent people. I hesitate to use the word "innocent", but in a sense they are because they have not breached copyright. What that makes them, I do not know, but certainly they have not been acting illegally or are guilty of any criminal offence. The SRA is apprised of the matter, although perhaps it is not moving fast enough. The Minister and his colleagues in the business department and the DCMS should be fully aware that this is a hot topic and that there have been complaints of professional misconduct against the firms involved.

Baroness Howe of Idlicote: My Lords, as regards those who produce material which is shared without any remuneration to the originator, I am in favour of them being properly compensated for that which is downloaded. I speak as someone who, for the first time, has received a letter about ACS:Law Solicitors, which I found pretty disturbing, as I do the fact that ACS:Law Solicitors has up to six years to keep this correspondence hanging around. Even though the SRA has been contacted again, the matter does not seem to have moved on particularly fast. Of course, one is hearing only one side of the story, so I cannot say more than that.
	It is worrying and I assume that the Minister will address this issue seriously in his reply. I gather from the shaking of his head that he is aware of at least some of the complaints that have been coming in his direction.

Lord Howard of Rising: My Lords, the amendments in this group build on my noble friend's suggestions of other useful criteria that should be included in any assessment by Ofcom. I have already mentioned briefly the cost of any measure and I should like to emphasise how important it is that proper scrutiny is given to the cost that will fall on internet service providers forced to implement the technology necessary to impose a technical measure.
	Amendment 163 touches on a point raised much earlier in these debates. If technical measures are imposed crudely and in large numbers, perfectly legitimate internet companies might suffer. I can easily imagine a company setting up a lawful file-sharing site, notwithstanding the implementation of Clauses 4 to 9. If a technical measure is imposed on large numbers of subscribers that bans access to any file-sharing sites, rather than just those that provide unlawful material, a promising alternative could be strangled at birth.
	Amendment 164 is self-explanatory. It seeks to tie the assessment under Clause 10 specifically to the progress reports under Clause 9. At the moment, one of the greatest weaknesses of these clauses is the lack of read-across from Clause 9 to Clause 10. This amendment would improve that.
	Amendment 167 is essentially a summary of the points that have already been raised. I am sure that the Minister will be pleased to see that it is only a guideline for Ofcom to follow and not a prescriptive list. However, all the matters outlined in it are fundamental to whether a measure will be successful. The possibility that one of these matters might be overlooked in a hasty assessment or completely ignored in the rush to implement the necessary steps is worrying. I hope that this amendment will do much to promote a considered approach.
	I, too, have received correspondence about these people who are sending out bullying letters. I add my plea to the Minister, if only for it to appear in Hansard for the benefit of those people who have corresponded with us pointing out this appalling behaviour.

The Earl of Erroll: My Lords, these are extremely important amendments. They must be there to guide Ofcom in its deliberations. My noble friend said that the copyright resides with the originators, but usually it does not. It is owned by six large rights holders-copyright holding companies-because they have the originators under contract from day one. Only a very small amount of money filters out to the creators the work. Most of it is rental on the back catalogue owned by large rights holders. We have to keep that in the back of our minds when we are told that this will kill creativity-it is not necessarily so.
	The main point I want to make is about the unintended consequences that may arise when we implement the technical measures and why Ofcom must take into account wider considerations The sort of thing that could happen is that a company sets up and sensibly wishes to deliver most of its stuff over the internet. It is selling into a market that also happens to coincide with people who have an age profile in the group that tends to download music-music being the easy one to catch as it is the most popular in this area. You could stop their market and bankrupt them overnight. It is a bit like secondary picketing by the trades unions: the same principle of trying to prevent one evil while actually creating another. The same applies to the Government in their delivery of services electronically to reduce costs to taxpayers. If we end up having to intervene to make this effective, by cutting off a tiny proportion of infringers, say 100,000, it could have an impact. If we tackled just 10 per cent of the infringers, which is not an enormous proportion, 700,000 people would be unable to use the internet properly. That is a significant part of the market.
	Funnily enough, it would probably also penalise those with good, innovative methods of distributing music and film. At the other end of these connections will be subscribers who both download to sample stuff unlawfully and buy stuff lawfully. So it may have an effect on the market that we should be developing. This needs to be considered incredibly carefully. A final thing is proportionality and the EU. The European Parliament, in saying that people's internet could be cut off only by going through judicial procedure, recognised that these days it is almost a basic human right to have access to the internet. Our legislation must be proportionate or it will fall foul of EU legislation. On those grounds alone, proportionality must be put in it somewhere.

Lord Puttnam: My Lords, I want to clarify something that the noble Earl, Lord Erroll, just said. He rightly pointed out that the bulk of copyrights are owned by a limited number of very large corporations. We in the copyright world call them investors. They supply the capital that makes the production of intellectual copyright possible. I have been following this Committee for several days, and for me, the elephant in the Chamber is the requirement to have capital markets with sufficient incentives and a clear, visible marketplace in which they can invest to ensure that the creative people can make products that we want and that we can circulate in the marketplace. I am afraid that it is nonsense to assume that we can allow the well to dry up by doing nothing or taking insufficient action on copyright abuse. Should we do so, investment will withdraw and eventually the entire creative process will dry up.

Lord Young of Norwood Green: My Lords, new subsection (4)(b) allows the Secretary of State to direct Ofcom to carry out an assessment of the likely efficacy of a technical measure in relation to a particular type of internet access service. Amendment 161 would add "proportionality" and "objective justification" to the assessment. While I have sympathy with the view that these are important criteria, I do not think it is necessary for Ofcom to do this because they are points that the Secretary of State will have to consider as part of the decision whether to make the order to impose technical obligations, and on what terms.
	On the other amendments in the group, new subsection (4) in Clause 10 sets out the steps that the Secretary of State might particularly direct Ofcom to carry out as part of conducting an assessment of whether technical obligations should be introduced, or taking steps to prepare for them. As such, it identifies the main things we consider it will be important should be done: proper consultation, an assessment of measures which would work and early preparation of a code. We are not suggesting that these are the only things that the Secretary of State might ask Ofcom to do as part of making an assessment, nor yet all the things that Ofcom would expect to include in an assessment in order to do it properly. I do not think it would be helpful to try to do that.
	There is also a risk of duplication here. For example, the issues raised in Amendments 162 and 163 are likely in any case to be captured under the existing reference to an assessment of efficacy. So while there might be much benefit in the Secretary of State asking Ofcom to consider these and other issues, I do not think that they need to appear in the legislation. I hope noble Lords will take that into account.
	On the much-discussed and debated ACS:Law, I am glad that it has at least been reported to the SRA but regret that no action seems to have been taken to date. I am not sure whether I have fully understood the point made by the noble Lord, Lord Lucas. I thought he was welcoming the Bill in that our process might well be described as taking a graduated approach. In the first instance, people will be sent a letter saying, "It appears that there has been an infringement. If it has been done unwittingly or by someone else, here is what you can do to remedy the situation". We are laying down what I think is a proportionate, reasonable and fair procedure. We have to ensure that it is all reflected in the code and that we build in all the rights of appeal and so forth, as we have discussed in our debates here in Committee. We like to think that that will influence the process that will eventually end up in the courts; that is certainly our presumption. I repeat my assurance to write to the Ministry of Justice.
	I stress that so far as we are aware, firms are operating within the existing legal framework, a point which to a certain extent was confirmed by the noble Lord, Lord Lucas. It may not be a procedure that everybody likes, and in some cases I presume that people have been guilty of the offence, but we are saying that this Bill cannot be the vehicle to deal with it. As we have said, it provides a graduated response that seeks to change the culture and the behaviour.
	I am glad that the noble Baroness, Lady Howe, is with us at least in principle and thus is in favour of proper compensation-that is what we are trying to achieve. The noble Lord, Lord Howard, asked about the costs to internet service providers. We share his concern because this has to be something that they are capable of dealing with and does not undermine their normal operating procedures. The costs associated with any technical measure will therefore be the subject of a separate statutory instrument and a new or revised code. All this will be subject to scrutiny and I take entirely the noble Lord's point that we keep control of it.
	The noble Lord also talked about a rush to implement necessary steps. We are not going to rush this, and I hope that a future amendment will demonstrate our response to concerns that sufficient time is provided to see whether the first set of technical measures has had an effect before contemplating the need for further ones. We shall come back to that.
	I listened carefully to what the noble Earl, Lord Erroll, said about the law of unintended consequences, but I do not think that we are in any way likely to stop legal markets operating overnight. There was a presumption that, assuming we did catch 700,000 people in our first attempt, all of them will carry on with their misbehaviour-assuming that they are misbehaving. I do not take that view; I think that we will be able to change them.
	If we want to introduce some balance into this debate and an overall assessment about what we are trying to do, then I thank my noble friend Lord Puttnam for doing just that. These are not just minor infringements, and they apply not only to music, and as my noble friend Lord Puttnam knows, because films are also very much affected by them. I quoted a case the other day in which the film "Avatar", on the very day that it was released, was downloaded, including the 3D version. We should not kid ourselves that these are just minor downloads of the odd piece of music.

The Earl of Erroll: My Lords, I just point out to the Minister that "Avatar" is the second-highest grossing film in history, so a few downloads has hardly affected it. I do not think that we can say that they are completely bankrupting the film industry. The fact that it has a technical aspect, the 3D, which makes it far more enjoyable to see in a cinema perhaps points the way that the industry should be looking.

Lord Young of Norwood Green: My Lords, I must admit that I struggle with the analysis of the noble Earl, Lord Erroll. He seemed to be saying that it does not really matter if people steal the copyright. I must say that it does matter. It does not matter that they managed to gross a profit on "Avatar": if we are serious about the principle of rewarding copyright owners for their investment, then we have to treat infringements seriously and we cannot dismiss them. I am afraid that we are never going to reach agreement on that perspective on copyright.
	On the question of the telecom framework directive raised by the noble Earl, Lord Erroll, we believe that the provisions in the Bill are consistent with the final outcome of Amendment 138. That requires a fair and transparent prior process that allows the consumer the right to be heard. I have dealt with this issue on many occasions so I shall not take any more time. I hope that, in the light of the explanation and assurances that I have given, that the amendment can be withdrawn.

Lord Lucas: My Lords, I suspect that we are not going to agree on "Avatar". It seems to me that the industry is being peculiarly stupid about it-it got 300,000 free advertisements. "Avatar" is something that you cannot consume sensibly on a small screen: you need the big-screen experience to appreciate all the work that they have put into it. The immediate consumption of it created an enormous demand for going to the cinema, which has benefited the film enormously. That is the fundament of this-we must get the industry to see this as an opportunity and not as a threat.
	We must get the industry to be in there selling these downloads. If the industry had been in there selling at a dollar a time, it would be better off for it and it would still get the advertising. Its refusal to deal with the way that the world has moved on and with what technology makes possible, and its attempt to stick to old ways of doing things and to the idea that you can release a film in the United States today and wait six months to release it in the UK, is a looking-backwards attitude which we should not support through legislation. Yes, we should support copyright, but we should direct ourselves at real losses and not imagined losses. I do not believe that the makers of "Avatar" have lost a dollar; in fact, I think that they have gained a great deal from the piracy. We should not seek to punish people for losses that have not occurred.
	When we come back to the question of what is going to happen on the Bill, after what I agree are shaping up to be quite reasonable preliminary procedures, we must have something to make sure that Norwich Pharmacal orders are not given, willy-nilly, to people who have not gone through this procedure. We have produced some comfort for the citizen in the Bill; we must at least make sure that judges consider whether or not this procedure should be used before Norwich Pharmacal orders are granted.
	We must also do something about the quantum of damages that is being sought. In a civil procedure on a technical matter, it amounts to blackmail; the cost of defending one of these things is reckoned to be £10,000. You can get away with asking for £500 or £1,000 and be paid on most occasions without any effort having to be made to really establish guilt. It is straightforward legal blackmail, and we should do something about it by making sure that where damages are asked for, they are, at least for first offenders, at a rational level.
	That said, I do not think the Minister addressed the phrasing of either of my amendments. I did not hear a reference to the Human Rights Act aspect. I apologise; I am going deaf.

Lord Young of Norwood Green: I referred to the telecom directive. We have said numerous times-as the noble Lord said, we have been over this ground on many occasions in this Committee-that we will be compliant with the Human Rights Act as well as the telecom directive. I was trying to save the odd amount of time by not going over the same issue. As a noble colleague of mine once said, reiteration does not always enhance the value of the point.

Lord Lucas: No, my Lords, but eventually it seems to draw useful answers out of the Government. The fact that one has to ask the same question five or six times to get the answer that one is seeking is, I am afraid, just a characteristic of the way that Governments work sometimes.
	The word "proportionality" in my Amendment 161 is important. I understand that the Government resist its inclusion. Since I was arguing yesterday against the inclusion of the word "proportionality" in a Bill and was successful in that, I suppose I should be content to be consistent. I hope that this means at least that the Government are converted as a result of the reverses they suffered yesterday. I beg leave to withdraw the amendment.
	Amendment 161 withdrawn.
	Amendments 162 to 167 not moved.
	Amendment 168
	 Moved by Lord Clement-Jones
	168: Clause 10, page 13, line 12, at end insert-
	"( ) OFCOM may make a recommendation that the Secretary of State consider introducing a technical measure identified in this section."

Lord Clement-Jones: My Lords, I move Amendment 168 on behalf of my noble friend Lady Miller. I shall speak also to Amendment 174.
	In the course of our debates, the Minister has reassured us that the technical measures will not be imposed without demonstrable failure of the initial obligations and that there will be a graded response. The question is: what will be the empirical evidence that the initial steps have failed to cure what is clearly an issue? I am not at all at odds with what the noble Lord, Lord Puttnam, had to say in that respect. We wish to see the proper upholding of copyright, but it has to be done-to use the word that the noble Lord, Lord Lucas, has almost but not quite resiled from-in a "proportionate" way.
	On what basis will that be done? We do not believe that it should done purely on the basis of the Secretary of State's decision. Pure whim, the length of thumb of the Secretary of State-we have talked about this in earlier debates. It should be done on the basis of a proper report by Ofcom, whether a regular report or a special report. That applies to both Clause 10 and Clause 11.
	I hope that the Government will look again at this aspect because, in order to create confidence, technical measures are an important step. As we know, and to repeat what I said earlier, they have caused a great deal of controversy, but if they are to be introduced then that must be on the basis of proper evidence that the steps taken to date have been a failure. The only institution that will carry confidence and will be regarded as being sufficiently objective in those circumstances is Ofcom. That is the reason for Amendments 168 and 174. I beg to move.

Lord Lucas: My Lords, I entirely agree with Amendment 168; my Amendment 173 tackles the same question in different words.
	Amendment 172 is intended to make sure that the industry has looked after its side of the bargain. In return for passing this Bill, we should be requiring that the industry moves ahead and makes product easily available on the internet in proper volume, at a proper price. Its failure to do this is the reason for the whole problem. This market developed and the industry refused to address it-it turned its back on it. People, particularly young people, said, "We are not having that. If they will not give us this stuff in the way that we want it we are going to get it". I have an enormous amount of sympathy with that. I agree that we must tackle the problem and deal with the piracy that has developed, but we should not allow the industry to continue to create the conditions where piracy flourishes. We should not allow it to continue to encourage people into piracy because it will not provide its product in the way and at the time that people want it.
	Certainly, people ought to be able to hold product back: I am not at all saying that someone who comes up with something which is not public should be protected in some way. But at the moment the industry is refusing to license additional outlets for the internet availability of music, and although the wholesale price of a music track is somewhere around 20p-not the retail price, of course, the wholesale price-it is trying to run vastly inflated prices on new entrants trying to come into the market and compete with iTunes. That is pure monopoly behaviour and we are creating the monopoly for the industry in this Bill. We are giving it additional defences. We must require that the industry, as well as ourselves, address the problem, or else it will merely occur in another and more difficult form.
	We already know that there are technical ways around this Bill-that is why Clause 17 is sitting in there, not that I think it is satisfactory. We already know that people will use cyberlockers or encryption. The only answer to this is to make sure that the industry keeps its side of the bargain and makes product easily available at a sensible price so that people do not have to go down the piracy route, and so that they do not go down this route because they cannot get at the stuff that they want, but because they do not want to pay the proper price for it. Under those circumstances the sanctions we have in this Bill are justified. However, if the industry refuses to make product available-"Avatar" is a very good example of a refusal to make product available when customers want it-why should we defend it? It does not seem to be part of the copyright bargain that we should allow that.

Lord Howard of Rising: My Lords, this group of amendments has one overriding theme: when is it appropriate for the Secretary of State to use these powers, and who is the best person to assess whether they are being used correctly?
	I am not entirely comfortable with Amendment 168 and its suggestion of giving Ofcom such an explicit advisory role. I agree entirely that Ofcom is well-placed to make an accurate assessment as to the efficacy of any, or a particular, measure, and I agree with my noble friend's Amendment 172 that the wider market should be taken into account. However, there is an important difference between setting out the pros and cons of a step in an impartial manner, and actively seeking to influence government policy. Ofcom should participate enthusiastically in the former but stay well away from the latter.
	My Amendment 171 would impose a level of parliamentary scrutiny on the process. The Minister has accepted the Delegated Powers and Regulatory Reform Committee's report on the standard of parliamentary scrutiny that would be appropriate for a Clause 11 order. My amendment seeks to ensure that Parliament will be properly informed when debating the order.
	It is unavoidable that there will be considerable controversy over the imposition of technical measures. We have all received arguments and counterarguments over the past few weeks from internet service providers, copyright owners, other online companies and subscriber groups in relation to Clauses 4 to 9. It will be no different if Clauses 10 to 16 are ever implemented.
	An impartial assessment of the measures being discussed will be an invaluable tool for weighing up these arguments. The Minister will surely appreciate how continuing uncertainty over the actual cost of implementing the earlier provisions has complicated debates on the apportionment of costs. In just the same way, ensuring that Parliament is fully informed with the best available data will help to ensure that scrutiny is effective.

Lord Puttnam: My Lords, before the Minister responds, it might be helpful if I bring to the Committee's attention the excellent report published yesterday that was produced by the House of Lords Communications Select Committee, under the chairmanship of the noble Lord, Lord Fowler, entitled, The British Film and Television Industries-Decline or Opportunity? Pages 39 and 40 of that report, which I commend to the Committee, contain a very sensible and well thought-through analysis of this issue. It would be enormously encouraging if the rest of this debate could take place within the framework set out in that report. It is sensible, forward looking and demonstrates an understanding of these complex problems. I hasten to add that I was not on the committee, but an enormous amount of time, trouble and energy have gone into producing the report, and it seems extraordinary to me that it is not informing this Committee's deliberations.

Lord Young of Norwood Green: On Amendment 168, Clause 10 is intended to give the Secretary of State the power to ask Ofcom whether it recommends the imposition of one or more technical obligations on internet service providers, and to give Ofcom the tools needed to reach such a recommendation. I am not sure what this amendment could add to that.
	I agree with the noble Lord, Lord Clement-Jones, about the need for empirical evidence. However, his language was a little hyperbolic when he talked about the Secretary of State making a decision on a whim. We will not allow that. We have made it clear that this matter will require an affirmative resolution. We understand the importance of ensuring that we have the right evidence and of giving ourselves the opportunity to see whether the obligations change the climate sufficiently as to remove the need for the technical measure. There is no debate between us on this. I keep reiterating these assurances, mainly because I understand the concern that has been expressed, and because I hope that they will be accepted. The noble Lord, Lord Howard, expressed a similar concern in relation to the Secretary of State. I again point out that we are talking about an affirmative resolution.
	The noble Lord, Lord Lucas, talked about product availability. Of course, there are products out there. We will certainly not create a monopoly. Again, that is hyperbole. ITunes is not the only provider; there is Spotify and plenty of other examples. I am sure that the market will continue to expand. However, I am still puzzled by the fact that the noble Lord and the noble Earl, Lord Erroll, seem to believe that somehow it is perfectly okay for illegal downloads to take place. I do not share that view. I shall not mention the A-word again because we have had far too much debate on that, but I do not understand why we should be happy for people to go into cinemas with camcorders and illicitly download material, and why we should wish to protect that. We believe that there is an obligation on the market to-

Lord Fowler: The noble Lord mentions camcorders. I agree with him entirely. It was for that reason that we made a proposal in the Select Committee report, which the noble Lord, Lord Puttnam, has just mentioned, that there should be a specific offence covering camcorder crime. Some of the arguments that are being put forward on freedom I regard as pretty phoney. However, there is no argument whatsoever on camcorder crime. It is absolutely deliberate crime. Why do the Government not put forward a specific offence as far as that is concerned?

Lord Young of Norwood Green: I was hoping that I would inspire the noble Lord to make a comment and I thank him for his assessment. I do not feel that I can respond as to why we are not doing that, but I will take that point away. I thank him for that part of the analysis, which reinforced the point that my noble friend Lord Puttnam made in relation to the framework of this debate.
	I say to the noble Lord, Lord Howard, that I have a lot of sympathy with Amendment 171. The assessments that Ofcom carries out will clearly be of significance in the Secretary of State's decision whether technical obligations should be imposed on internet service providers. They will be of interest to both Houses of Parliament and more widely. I also take the point that he makes about the apportionment of costs. We gave an indication of that, but it is not set in stone. We understand the importance of this.
	On Amendment 168, there may be a need to ensure that confidential or other sensitive information is protected. I suggest that this is something that we should take away and consider.
	On Amendment 173, I do not think that this is a responsibility that Ofcom should take on. Imposing technical obligations would be a serious matter and likely to be controversial. I again agree with the assessment made by the noble Lord, Lord Howard-I am fearful of this concurrence, but when it is right, it is right-that such a decision should be taken by a Minister rather than delegated to the regulator, as the decision is one for which the Minister can be held to account. It is significantly quicker for a Secretary of State to reach a decision and act through an order subject to the affirmative procedure.
	As for Amendments 174 and 174A, there is no doubt that the report produced by Ofcom will be highly relevant to the decision on whether to impose technical obligations. However, I do not think that we should allow the Secretary of State to consider only Ofcom's assessment. He must have the ability to consider other factors, such as initiatives emerging at a European level. I also understand the wish for the decision to be taken on the basis of assessments from Ofcom. However, Amendment 174A might weaken the wording, as "following" merely suggests a sequence of events.
	I understand what noble Lords are seeking to achieve, but on balance there is more to be said for keeping a degree of freedom for the Secretary of State-at the same as he is accountable to Parliament through affirmative resolution-to take the full range of considerations into account when recommending an important decision, which should remain his responsibility. On the basis of that explanation, I trust that the noble Lord will feel able to withdraw the amendment.

Lord Lucas: My Lords, I entirely agree with the noble Lord that my noble friend Lord Howard of Rising has won the argument on Amendment 171 and that I should not pursue Amendment 173. However, I want to set the noble Lord straight on where I am aiming at in this Bill as a whole.
	I do not think that any of us is defending illegal downloading. We are all trying to produce a system that gets copyright owners, of whom I am one, a proper return for the product that is sold over the internet, of which I do a good deal. My concerns arise as I do not believe that there are acceptable technical measures that will deal with the methods that illegal downloaders will resort to if we do not make it possible for them to obtain the product that they want, in the way that they want, easily and at a sensible price. If we support the industry in its backwards-facing approach, we will merely get the illegal downloaders adopting methods to which the only solution is deep packet inspection. That essentially means that we will allow officialdom to see our entire internet traffic. I do not think that that is what the Government intend or what any of us would find acceptable, particularly as a measure just to protect copyright. Protecting copyright to the extent that the law requires it must be in the context that the industry is doing its bit, too.
	I shall take the approach that protecting my own copyrights is best done by enhancing the user's experience, whereby cheating and copying will result in a less fulfilling experience than paying the price that I am asking. It is perfectly possible for the industry to do that; indeed, parts of it are doing that. Regarding those who need only copyright protection, we should not continue to refuse to make material available. I return to the example that the noble Lord gave about "Avatar". As soon as there is a buzz out there about a film, people want to see what it is about, have something to satisfy that curiosity, know what they should be going to and be part of this great experience-although they have not yet been to the cinema. We should require the industry to deal properly with its customers.
	All my amendments are aimed merely at trying to get the industry to recognise that we are in a new century and that there are new ways of doing things and making money out of copyright. That is what the industry should be pursuing. I entirely agree with the noble Lord that no one in the Committee is saying that we should not defend copyright or that we should in some way promote or allow illegal downloading.

Lord Clement-Jones: My Lords, I thank the Minister for his reply and I thank those who have taken part in this debate. Further to the remarks of the noble Lord, Lord Lucas, I do not believe that copyright owners are the only ones with the moral high ground. We are trying to find a balance; that is what these debates have been about. We may have been kicking the Minister but we have actually been kicking the tyres of the Bill. We have heard some interesting responses and interesting aspects have been raised.
	The noble Lord, Lord Puttnam, mentioned the report of the Communications Committee of this House. It was a very good report, which was given considerable coverage, but none of us is unaware of the need for better copyright protection. The noble Lord, Lord Fowler, made a perfectly apposite point that further amendments to protect copyright need to be made. Many of them relate not to codes or the civil law but to the criminal law. The recent OiNK case is probably an illustration of that. The use of camcorders is another area where the criminal law could be brought to bear. However, the Government have shied away from inserting such provisions in the Bill. It will be interesting to see whether they will introduce them in the future, or whether any future Government will do so. Such provisions will be the real heavy artillery for the protection of copyright.
	I heard what the Minister said about the need for empirical evidence and I was cheered by his agreement. I was not cheered by his disagreement with my amendments, but we are philosophical about these matters. I am sure that his words will be read with enormous care in years to come when people see the Secretary of State, by edict, imposing technical measures. Nevertheless, in the mean time I beg leave to withdraw the amendment.
	Amendment 168 withdrawn.
	Amendment 169
	 Moved by Lord Clement-Jones
	169: Clause 10, page 13, leave out lines 13 to 15

Lord Clement-Jones: My Lords, the amendment is a straightforward attempt to bring the Minister out of his lair to debate subsection (5). It seems extremely broad in the context. It states:
	"Internet service providers must give OFCOM any assistance that OFCOM reasonably require for the purposes of complying with any direction under this section".
	That seems to impose a very broad duty. It would be useful to hear how the Minister believes that will operate and the kinds of duties and liabilities that it will impose on ISPs in the circumstances. I beg to move.

Lord Lucas: My Lords, I speak to Amendment 170. Although ISPs have the major role to play, copyright owners have a crucial role to play, too. It is they who generate the evidence on which the whole process is based. How they do that, the methods and technicalities of the systems that they are using and the quality of the evidence that they are generating are an enormously important part of moving to a system where the justice is more summary than that which is available through the civil courts. It seems to me that they cannot black-box this stuff; they cannot say, "This evidence is true but we aren't going to tell you how we got it". They have to disclose to Ofcom the exact methods that they are using and they have to expose those methods to a critical analysis, so that Ofcom can be sure that that part of the process is working well enough to justify the rest of the process. I think, therefore, that they should be included in this clause.

The Earl of Erroll: My Lords, the amendment tabled by the noble Lord, Lord Lucas, is extremely important. We have to be balanced. If we are going to require certain things of the ISPs, then the other side-or the other party involved-must also have the duty to provide them, otherwise the process is hugely imbalanced. I take this opportunity to say to the Minister that this is not a "them and us" situation. One is not trying to be against the copyright holders. I endorse entirely what the noble Lord, Lord Lucas, said about the last amendment.
	These last three groups of amendments have been about trying to ensure that Ofcom and the Secretary of State have sufficient information to make a properly balanced decision. The challenge on the first group was that the Minister said, "You don't need Ofcom to have this information because the Secretary of State will take it into consideration after he sees the report". On the second group, we heard that Ofcom was going to advise the Secretary of State primarily, so that what Ofcom says will be hugely important and it should be doing the wider, earlier investigation; if it does not, a report will be produced that is rubbished by the Minister and the Government will get egg on their face.
	The Minister should take all this back and think about what will inform the decision of the Secretary of State to go further into the technical measures. It is when the technical measures start getting implemented that whichever Government are in charge will have a huge outcry from the general populous. If widespread technical measures are put in place, businesses will react and possibly relocate out of the UK and there will be huge effects on the market. If that does not happen, then all well and good, but I would rather look on the gloomy side than say, "We just hope people will respond".
	We have to work out whether Ofcom will produce a complete report, in which case we need the provisions of the earlier amendments, or whether it will be the Secretary of State, in which case we can downplay the importance of the Ofcom report. Either way, Amendment 170 is essential for us at least to get balance at this stage in this requirement.

Lord Howard of Rising: My Lords, I am concerned about the level of information that Ofcom might be able to require from an internet service provider under this subsection. I am partly reassured that "reasonably" is included in the drafting but would very much like to hear a little more on the exact meaning of that word in these circumstances.
	I agree with my noble friend and the noble Earl, Lord Erroll, that there could be circumstances in which the involvement of copyright owners might be very useful. For example, as we have discussed, one measure that a subscriber might take to prevent another person from breaching copyright on his account would be to block sites known to provide unlawful material. It would not be inconceivable that a technical obligation might consist of a list of similar sites that the internet service providers must block to certain subscribers. If this is the case, the copyright owners would be a useful resource to keep an up-to-date list of websites that qualify for blocking.

Lord Faulkner of Worcester: My Lords, I thank all noble Lords who have contributed to this short debate. We have already discussed a wide range of issues that the Secretary of State might want Ofcom to look at in any assessment under Clause 10. It seems self-evident that on a great number of them, in particular those involving the cost of operating technical measures and the ability of the ISPs to impose specific obligations, Ofcom will require help and information from ISPs. We therefore believe that new subsection (5) in Clause 10 is a very important provision. I disagree with the suggestion of the noble Lord, Lord Clement-Jones, that it could be deleted. If Ofcom were not able call on ISPs to provide information in this context, there is a risk that any Ofcom assessment under Clause 10 would be lacking in vital information and could lead to the wrong conclusion.
	From the perspective of Amendment 170, tabled by the noble Lord, Lord Lucas, nothing on the long list of things that noble Lords have drawn to our attention as needing consideration in these assessments would require technical or commercial information from copyright owners. If we are wrong and it transpires that some do, Ofcom will have the power to require it under Section 135 of the Communications Act by virtue of the amendment to the Act in Clause 16(2).
	I would like to be able to give the noble Lord, Lord Howard of Rising, the definition of "reasonable" that he sought. Perhaps during the course of proceedings I will be able to do that, but I cannot for the moment. In the mean time, I hope that the noble Lord, Lord Clement-Jones, will agree to withdraw his amendment.

Lord Clement-Jones: My Lords, I know that the Minister is intent on being brief and efficient in his responses today, but I fear that his response was a little too brief. He talked about the information and help that internet service providers may be asked to, and should, give and referred to a long list. I must have missed this somehow. Certainly in his response he did not list anything. I asked what kind of assistance would be required and what kinds of liabilities would be undertaken by the ISPs, but I did not receive any answer. A little recapitulation would be extremely helpful.

Lord Faulkner of Worcester: I can help the noble Lord to some extent. One thing that the ISPs might need to provide Ofcom with is technical help in areas such as participating in technical workshops. We do not take the view-here I revert to the amendment tabled by the noble Lord, Lord Lucas-that copyright owners are likely to have to provide that sort of practical help.

Lord Clement-Jones: My Lords, "participating in technical workshops" sounds a bit thin. This is a very wide clause to ensure that internet service providers take part in technical workshops. I hope that when the amendment comes back on Report, as I fear it must because the reply has been so thin-

Lord Lucas: My Lords, perhaps I may pick up on the reply given to my amendment, now that I have had time to research it. If this applies and a reference in Clause 16 brings copyright owners, who are fairly peripheral people, within Ofcom's ambit, why do we need this subsection, because surely internet service providers would be there too?

The Earl of Erroll: That had occurred to me as well. It seemed to me that the clause was either otiose or not. On the technical workshops bit, at a previous stage of the Bill the Minister pointed out that the rights owners have their own organisations monitoring this traffic and that monitoring will supply the information to the ISP to start logging against a particular subscriber to find out how many infringements there are, and then one goes further on to the Norwich Pharmacal order. The rights owners will have to respond to various privacy enhancing technologies which will appear: the "dark net", which started last autumn, is already here and then there are things like Tor, proxy servers and so on. There will also be quite a lot of technical things that the rights holders' monitoring organisations will have to respond to. The concept that they will not be involved at a very technical level in trying to monitor is very weird to me.

Lord Faulkner of Worcester: I can help the Committee a little more. The copyright owners download material, or part of it, and as they do so they note the exact date and time and the IP address being used. That enables the ISP to associate that with a particular subscriber. It is part of the audit trail through which one is able to track the downloading of copyright material.

The Earl of Erroll: The two technologies which I have just mentioned mean that the IP address received is not the IP address of the subscriber; it is another IP address supplied by an intermediary. Therefore, they will have to find technical ways around that and that is when it becomes interesting as regards the efficacy of the technical measures proposed. You have to talk to this part of the rights owners' organisations or you will not find out whether what they have is effective.

Lord Faulkner of Worcester: In response to the noble Earl, I make the point that we would certainly be prepared to talk to the rights owners if it is necessary to amass that sort of technical information.

Lord Clement-Jones: This is getting curiouser and curiouser. Although the noble Lord has been helpful in giving me something extra as regards the information which might be required from an internet service provider, it seems to me that he has made the case for the amendment in the name of the noble Lord, Lord Lucas, because these are quite technical things. In those circumstances, the copyright owner is intertwined with the ISP and, in terms of the information which needs to be obtained to ensure that these technical measures are effective, they will need to talk to the copyright owners as well. The noble Lord, Lord Lucas, has not had an answer to his point that if copyright owners are dealt with by another section of the Communications Act, why not the ISPs. Surely what is sauce for the goose is sauce for the gander.
	Many questions are still unanswered. As this is at the core of the Government's proposals, it is somewhat surprising that the Government have not laid out their stall rather more successfully. Before the next stage of the Bill, I hope that the Government will give this further consideration. In the mean time, I beg leave to withdraw the amendment.
	Amendment 169 withdrawn.
	Amendments 170 to 172 not moved.
	Clause 10 agreed.
	Clause 11 : Obligations to limit internet access
	Amendments 173 to 174A not moved.
	Amendment 175
	 Moved by Lord De Mauley
	175: Clause 11, page 13, line 25, leave out "or" and insert "and"

Lord De Mauley: Amendments 175 and 176 focus on the reasons that the Secretary of State may give for imposing a technical obligation. They raise a number of points so, while being as brief as I can, I shall try to set out my concerns as clearly as possible.
	Amendment 175 was intended to highlight the fact that by allowing paragraph (a) or (b) to provide justification for the imposition of technical obligations, the Bill in fact allows the Secretary of State to avoid any assessment by Ofcom. This is clearly not desirable. I hope that the Minister will agree with me that it would be irresponsible to impose such potentially drastic demands on ISPs without a proper assessment. No order should be made under this section without Ofcom being asked to undertake that necessary preparation. Unfortunately, Amendment 175 is not sufficient as currently drafted and I apologise for this. Since putting it down, I have realised that the phrasing,
	"assessment carried out or steps taken",
	would allow once again for no assessment to be undertaken. Indeed it seems possible for the Secretary of State to direct Ofcom to start the necessary steps under new Section 124G and then to use that direction as the reason why an order needs to be made under new 124H. Surely this is not the Government's intention, so we look forward to the Minister's explanation.
	Amendment 176 is very much a probing amendment, I hope that the Minister will be able to give us rather more detail about the intention behind paragraph (b). By putting down this amendment I do not mean that I am entirely opposed to the inclusion of a similar paragraph. After all, the Secretary of State should be able to take into consideration any relevant circumstances that might not be covered by an assessment. However, as drafted, this paragraph makes the entire section completely meaningless. At the very least, the section surely needs to be tightened up to ensure that an assessment is not merely an option but must be undertaken before an order is made. Furthermore, I think it would be extremely helpful if the possible circumstances that might be considered relevant, but which would fall outside an assessment, were made clear. I beg to move.

Lord Young of Norwood Green: My Lords, I rise early to see whether I can assist the Committee with some helpful comments. On the face of it, this is not an unreasonable thing to require the Secretary of State to do. It would ensure that an assessment of steps by Ofcom would have to be taken into account by the Secretary of State, as well as whatever else seems most pertinent to him when deciding on the appropriateness of requiring technical obligations to be imposed. In practice, the Secretary of State is always likely to want to have had a report from Ofcom before making such an order, and therefore we are willing to agree to consider this change.
	However I do not think we should restrict the Secretary of State to taking into account only an Ofcom assessment of technical obligations, or the steps taken by Ofcom to prepare for them, as proposed in Amendment 176. I do not think that it would be at all sensible to circumscribe the Secretary of State in this way. Inevitably-I think the noble Lord, Lord De Mauley, acknowledged this in his contribution-there are going to be wider societal or macro-economic factors or, for example, developments in Europe, that a Secretary of State is going to want to take into account. It is right and proper that he should do so. I hope that the Committee will recognise that Ofcom would not welcome being the sole source of advice which the Secretary of State has to take into account.
	In the light of my assurance that we shall certainly take away Amendment 175 and agree positively to consider it, and with my subsequent explanation, I hope that the noble Lord will feel able to withdraw the amendment.

Lord De Mauley: My Lords, I am very grateful to the Minister for his comments. It is quite a complicated area. I think we probably both need to take each other's words away to reconsider them. As I said, Amendment 175 is certainly not perfect. On that basis, I beg leave to withdraw the amendment.

The Earl of Erroll: Perhaps I may intervene before the noble Lord withdraws the amendment. I would have added my name to Amendment 176 if it had not already had four names on it.
	I should like to have some legal advice. I know that when matters reach the courts it is what is in the Bill that counts, not what the Minister says at the Dispatch Box. I do not know how much the context inside the Communications Act matters to the interpretation in the courts. New Section 124H(1) states:
	"The Secretary of State may at any time by order impose a technical obligation on internet service providers if the Secretary of State considers it appropriate in view of ... any other consideration",
	because the provision contains an "or". We must be very careful that we do not leave it as "any consideration" -I do not see that it is related to anything to do with copyright, even. I have no idea whether the context of new Section 124G means that it must be restricted to issues of copyright and copyright infringement, or whether the Secretary of State could use it for any purpose he liked-because he did not like someone's face, or whatever. I am being ridiculous and extreme there. I am very worried that we might inadvertently give a huge power to the Secretary of State. I know that it is very easy to make mistakes like that in law.

Lord Clement-Jones: My Lords, I very inappropriately failed to make a short contribution on the amendment, which was also signed by those of us on these Benches. The noble Lord, Lord De Mauley, made such a good fist of it that it needed no further addition. The Minister has partly answered on Amendment 176-sadly, because he is insistent that the Secretary of State should take other considerations on board, whereas Amendment 176 is designed to try to ensure that the pure channel of empirical evidence is via Ofcom and that Ofcom is the one to gather the appropriate information. The amendment was dealt with well by the noble Lord, Lord De Mauley.

Lord De Mauley: Taking into account the comments of both noble Lords, we are happy to wait for the Government to come back with their proposed wording. On that basis, I beg leave to withdraw the amendment.
	Amendment 175 withdrawn.
	Amendment 176 not moved.
	Amendment 177
	 Moved by Lord Clement-Jones
	177: Clause 11, page 13, line 28, at end insert-
	"( ) An order under this section must not be made until at least a year after the digital Economy Act 2010 has been passed."

Lord Clement-Jones: I shall speak also to Amendment 180. The Government have already made certain concessions on the process to be adopted for technical measures in their response to the Delegated Powers Committee, but I do not think that they have done so on the matter covered by my Amendment 177. We believe that a chance must be given for the initial obligations code to bed down before any new measures are adopted. Earlier, we tabled an amendment about waiting until Ofcom had issued its first annual report. This is very similar in import. I should be interested to hear what assurances the Minister can give. We certainly do not believe that it would be appropriate to act hastily in this respect. It would be an extraordinary set of circumstances for the situation to have got so bad that the Government felt that they had to introduce technical measures within a year. A year and then an assessment seems about right.

Lord Maxton: Does that mean that it would be two years before any action could actually be taken?

Lord Clement-Jones: Funnily enough, the noble Lord, Lord Maxton, has been answered by the Minister in previous debates. The Minister was insistent that preparations could take place before Ofcom had actually proposed that measures be taken. Although that did not satisfy me, it may satisfy the noble Lord.
	As regards Amendment 180, one of the key issues is how such a code should be introduced. This is simply an attempt to ensure that consultation takes place and that the affirmative process is used in those circumstances. We have not put on all the knobs, bells and whistles that the Government have put on to Clause 17, which forms a useful precedent for anybody wishing to make sure that an order is virtually unpassable. This is a rather modest amendment. I beg to move.

Lord Lucas: My Lords, the Minister may feel that my Amendments 179 and 207 cover ground which has already been sufficiently discussed. I would agree with him.

Lord Young of Norwood Green: The noble Lord nearly gave me a nasty turn.
	I will start with Amendment 177. I listened with interest to the concerns of the Committee last week that this part of the Bill is unclear about the order in which actions should happen and the timescales involved. I recognise that there are genuine concerns in this area. I have always made it clear that the Government intend to introduce technical obligations only if the initial obligations do not work. I agree, however, that it would be helpful to provide more clarity on the face of the Bill about the intention that technical obligations should not be introduced unless or until the initial obligations have been tried and found not to be sufficiently effective. For this reason it is our intention to propose, on Report, an amendment to Clause 11 to require a minimum period of 12 months following the coming into force of an initial obligations code before an order imposing technical obligations may be made. I hope that this will meet the concerns of the noble Lord and others with similar concerns that this will not be a rush to judgment. There will be a decent period of time; as I have said, our proposal is to have a period of 12 months following the coming into force of an initial obligations code on which there will be a consultative process.
	On Amendments 179 and 207, we have set out in the draft SI our views on how the costs of the initial obligations should be handled. The noble Lord, Lord Lucas, appeared to be satisfied in that respect so I will not dwell on that.
	Turning finally to Amendment 180, we discussed last week an amendment tabled by my noble friend Lord Mandelson to ensure that an order under this section is to be made by the affirmative procedure. I hope that that achieves what noble Lords want.
	Given my explanation, I hope that the noble Lord will feel able to withdraw the amendment.

Lord Clement-Jones: My Lords, these are two pieces of marvellous news; with regard to the second, although I could not find the Government's amendment in the right place, I knew intuitively that the Government had agreed to that. I thought I had better speak to my amendment nevertheless to make sure the point was dealt with.
	I am pleased by the Minister's promise of further amendment to make the point absolutely clear and I look forward to seeing what the Government produce. In the mean time, I beg leave to withdraw the amendment.
	Amendment 177 withdrawn.
	Amendment 177A not moved.
	Amendment 177B
	 Moved by Lord Young of Norwood Green
	177B: Clause 11, page 13, line 33, at end insert-
	"( ) No order is to be made under this section unless a draft of the order has been laid before Parliament and approved by a resolution of each House.""
	Amendment 177B agreed.
	Amendments 178 to 181 not moved.
	Amendment 182
	 Moved by Lord Lucas
	182: Clause 11, page 13, line 33, at end insert-
	"(4) An order made under this section shall expire three years after it comes into force, unless it is renewed.
	(5) At any time prior to the expiry of an order made under this section the Secretary of State may direct OFCOM to make-
	(a) an assessment of the effect of an order made under this section; and
	(b) a recommendation as to whether the order should be renewed.
	(6) When directing OFCOM to carry out an assessment or make a recommendation under subsection (5), the Secretary of State may also direct OFCOM to-
	(a) consult copyright owners, internet service providers, subscribers or any other person;
	(b) carry out an assessment of the likely efficacy of a technical measure in relation to a particular type of internet access service; and
	(c) take steps to prepare a proposed technical obligations code.
	(7) In making an assessment under subsection (5)(a), OFCOM shall include in its report an assessment of any directions given under subsection (6)(b).
	(8) The Secretary of State must lay before Parliament a report made under subsection (5) as soon as practicable after it is received.
	(9) At any time prior to the expiry of an order made under this section the Secretary of State may renew that order for successive periods of three years following a recommendation from OFCOM."

Lord Lucas: My Lords, I am surprised that Amendment 181 was not moved. Amendment 182 is merely an amplification of Amendment 181 but I would be interested to hear what the Government have to say. I beg to move.

The Earl of Erroll: I agree entirely with the amendments, although I preferred the first amendment in the group, Amendment 181, which has not been moved. It is short, simple and to the point, as opposed to Amendment 182, which is rather tortuous. We do not know what the effect of the powers will be. The pressure on parliamentary time can be incredible, and the three-year point is the stage at which Governments think of the next election and busily try to bolster their credibility with the public, so it may not be the best time to revisit something that is not working terribly well. The amendment would be a very good way of forcing the Government to revisit this. I think that the power is more draconian than the Minister does, but let us think of the worst picture. A sunset clause would be a good idea.

Lord De Mauley: I sympathise with the concern that a technical obligations order does not just run and run without any further assessment of its impact or effectiveness. Having a clear expiry date would also ensure that Parliament had an opportunity to assess whether the replacement order was still justified. We would object to ISPs continuing to bear a technical obligation to restrict the subscription of certain subscribers, even when technology subscriber behaviour or copyright law has moved on so as to make it irrelevant. That would be ridiculous, so there needs to be a quick and easy way to remove burdensome regulation when it is no longer applicable. I am therefore slightly disappointed that the noble Lord, Lord Clement-Jones, did not move his amendment.
	My noble friend's amendment is rather more detailed. It has the advantage of allowing the rapid renewal of an order to ensure that there is no break in its effect, while still ensuring proper ongoing assessment and scrutiny. I am sure noble Lords will also have noted the inconsistency between the detailed and almost excessive assessment of the impact of Clauses 4 to 8, as laid out in Clause 9, and the complete lack of any such reporting duty on the technical measures. We would not want to insist on three-monthly reports in perpetuity, as Clause 9 does, but some level of reporting is essential.

Lord Faulkner of Worcester: My Lords, I hope the Committee will forgive me if I do not speak to Amendment 181, as it was not moved. I am very happy to speak to Amendment 182, which is very interesting, and we can see the logic of what it proposes. However, while I suspect that in practice we will look at time limits, or at least review the continuing relevance and necessity of the measures, we do not think that it would be a good idea to set this in stone in the legislation. A shorter period may be preferable, and, while that would not be precluded by the amendment, it is inevitable that a time limit that is set in legislation becomes the default setting.
	Moreover, while the idea of requiring an assessment from Ofcom to be laid before Parliament is attractive-I am sure that we would all endorse basing decisions on evidence-we should not underestimate the resource that such an assessment would require. Ofcom would quite rightly regard it as a major task, and the cost, which would be borne by members of the industry, could be considerable.
	The Committee will not be surprised to hear that I also do not agree that the Secretary of State's ability to renew any such time-limited application of technical obligations should be on the basis of a recommendation from Ofcom, even though we highly regard that organisation. In the same way that we do not think it is right to restrict the initial decision to an assessment by Ofcom, we do not think that it should apply here. In practice, the view of the regulator will have force, but it should not be the sole arbiter of whether technical measures are needed, and I doubt very much whether Ofcom would wish to be put in that position. On balance, I hope that the noble Lord will agree that what I have said is reasonable and will withdraw his amendment.

Lord Lucas: My Lords, indeed, that is a very reasonable answer, and I beg leave to withdraw the amendment.
	Amendment 182 withdrawn.
	Clause 11, as amended, agreed.
	Clause 12 agreed.
	Clause 13 : Contents of code about obligations to limit internet access
	Amendment 183
	 Moved by Lord Lucas
	183: Clause 13, page 14, line 32, at end insert-
	"( ) that it makes proper provision for rights of appeal by subscribers concerning notifications (see subsection (1A));"

Lord Lucas: My Lords, we discussed this in the context of earlier parts of the Bill, and I hope the Minister will bear in mind our various conversations on the exact wording of these amendments. I am not trying to restart any of the arguments which the Government won, or which I persuaded them to accept, on what appeals should look like; I am just trying to address the basic requirement that a proper method of appeal should be available in these circumstances. It is not sufficient to leave this as a "maybe". It ought to be a requirement and spelt out in the Bill. I beg to move.

Lord Howard of Rising: My Lords, I agree with my noble friend that the scope of any appeal process relating to the imposition of technical measures should be at least as wide as for the measures in Clauses 4 to 8. A similar argument holds for the division of costs. If the Minister disagrees, I should be interested in his reasoning: infringement reports and technical measures are imposed on a subscriber on the basis of allegations made by a copyright holder and are implemented by an internet service provider. If anything, the appeal process should be tilted more in favour of the subscriber because of the more serious consequences of having technical measures imposed.
	As to the amendment in the name of the noble Lord, Lord Razzall, I hope very much that the Minister will not fall back on his desire for endless flexibility. But if he does not accept this amendment, I hope that he will give us an example of when it would not be absolutely necessary to include these measures in a code.
	My amendment probes a little further the question of whether a technical measure stands while an appeal is ongoing. It is our view that a technical measure should not be imposed until all avenues for appeal and objection have been exhausted. After all, a technical measure will have a significant impact on a subscriber and, if the measure is proved not to have been justified, it will be time-consuming, and possibly expensive, to compensate for the unjustified impact.
	Of course, there is the view that delaying the technical measure while a protracted appeal case is concluded merely allows for more copyright infringement, but if ever there was an incentive to establish a low-cost, effective and, above all, rapid appeal system, this is it. By postponing technical measures until the appeal system is over, an efficient system is to everyone's benefit.

Lord Clement-Jones: My Lords, I speak to Amendment 191, which was ably referred to by the noble Lord, Lord Howard. I thought that he made the point entirely appropriately that in some cases of parliamentary drafting the word "may" means "must". It is perfectly reasonable not to have a great debate about the use of those words. But in this case, there is an important point to be made about the contents of the code. It is important to get certainty from the outset.
	When we talked about the initial obligations code, we talked about what needed to be included and Clause 13(4) is an important element of that. The signpost should be "must" rather than "may". If no provision for the payment of a penalty to a person is specified in the code and there are no provisions requiring a copyright owner to indemnify an internet service provider or for postponement in the case of appeal, the code would be extremely deficient. Although this amendment is innocuous on the face of it, it is significant and I look forward to the Minister's reply.

The Earl of Erroll: My Lords, I agree with Amendment 191, which would change the word "may" to "must". Clause 13(4) does not include payment to the subscriber should it turn out to be an unjust disconnection, which could be extremely serious in the case of a small business. There could be a huge knock-on effect and it could bankrupt a small business. People are compensated for wrongful arrest and I would treat this situation in the same way. There could be extremely serious consequences on someone's livelihood; it is not that it "may" be taken into consideration but that it "must" be taken into consideration.

Lord Young of Norwood Green: My Lords, I agree absolutely that it is vital that there should be proper and fair provision for appeals for those subscribers who may find themselves subject to technical measures. The current text of Clause 13 already properly provides for an appeals mechanism, including to a first-tier tribunal if necessary. I appreciate the fact that the noble Lord, Lord Lucas, and other noble Lords, have expressed concern in previous Committee sittings that the Bill does not contain enough detail on the appeals mechanism and the protection that the subscriber should have. It is our intention to think hard about providing greater clarity on how the appeals mechanisms will work in relation both to the technical measures and the initial measures, the defences that the subscribers may rely on and how they can bring evidence to defend themselves. Those points have justifiably been raised previously. I cannot promise changes to the Bill, although they may be necessary, but I very much take the noble Lord's point that we need to think further about this, so we will be returning to it.
	I am not so happy to agree to Amendment 191, but I can bring good news on Amendment 193, tabled by the noble Lord, Lord Howard. We are prepared to consider it and I am happy to confirm here in Committee that it is the Government's intention that the full appeals process should be completed before any technical measure is imposed. Since it goes with the grain of the Government's thinking, perhaps we can take the amendment away and consider it further. I hope in the light of these explanations the noble Lord will feel able to withdraw the amendment.

Lord Lucas: My Lords, that was a very satisfactory reply and I beg leave to withdraw the amendment.
	Amendment 183 withdrawn.
	Amendment 184
	 Moved by Lord Clement-Jones
	184: Clause 13, page 14, line 39, at end insert-
	"( ) that regard is had to the nature of any service made available by a subscriber that is a library or an educational or cultural establishment, to its staff, members or users, and the degree of control that such organisations have over their internet access"

Lord Clement-Jones: My Lords, I shall speak also to Amendment 196. In another part of the Bill we discussed the whole area of wi-fi and library services. The Minister was very clear, eventually, in saying which side of the line libraries and wi-fi providers fell. I do not wish to prolong the agony of that debate unduly because we have dealt with the principles involved to a large extent, but there is considerable dismay particularly among cultural and educational institutions that they will fall on that side of the line. Many of them feel that they will have to rethink on whether they can continue to provide these kinds of services to students and so on. The Minister has been saying pretty consistently that they will have to take responsibility for all illegal downloading of those who use their service. That is a heavy responsibility for those institutions.
	The two amendments have a similar purpose, as did the previous amendments relating to the initial obligations code. I do not know whether the Minister has had time to reflect on these matters, but it seems extraordinary that we will be placing such a burden on these institutions. I heard what the Minister said about the kinds of things they could do in terms of installing software and so on, but this is not the family home. We are talking about university colleges and the young people who use the services are free agents. I hope that the Minister will think again about this. Certainly the correspondence that I have received since these debates began has been considerable. The cultural and educational sectors are very concerned about these matters.
	I hope that the Minister will think again about this. Certainly the correspondence I have received since we last had these debates has been considerable, and I can say that the cultural and educational sectors are very concerned about these matters. Perhaps the Minister will take the opportunity, on this second time around, to be rather more reassuring than he was the first time. I beg to move.

Lord Lucas: My Lords, I would be grateful if the Minister felt able enlarge on what he said last time about the measures that libraries and similar institutions can take to avoid the consequences of this Bill, given how their facilities are likely to be used and the nature of their customers.

The Earl of Erroll: My Lords, I endorse everything that has just been said. What is not in this amendment, but probably should be, is the position of local authorities providing free wi-fi as a public service, which is extremely useful in the modern digital world. The Minister might want to consider that before the next stage-indeed, I am sure that he will do so.

Lord Howard of Rising: My Lords, like other noble Lords, I have a lot of sympathy with the noble Lord's amendments. It is quite right that libraries and educational establishments might have particular conflicts between their founding principles of allowing users access to as broad a selection of material as possible and the Government's desire that none of those users should ever abuse the service. It is only common sense to require the Secretary of State to have regard to these difficulties when imposing a technical measure.
	Indeed, having regard to the feasibility of an order should be a concern across the board. Educational establishments might have difficulties with their principles, but other organisations might have difficulties on purely practical grounds. If a local shop is providing free wireless access, something that is of great benefit to the public, there is a limit to how effective any preventive measures they take will be, and there are some very technically expert people out there. It would be quite unreasonable to expect every service provider to counter every attempt to infringe copyright through their service.

Lord Young of Norwood Green: My Lords, as has been acknowledged by the noble Lord, Lord Clement-Jones, we have previously debated the issue covered by Amendment 184 at length: the position of libraries and other cultural institutions and their subscribers under the provisions of the Bill. As I have said, but it bears repeating, we value highly the service that such bodies provide in the community, but we think that so long as they take pragmatic and proportionate measures to protect their systems and deter copyright infringement, they have nothing to worry about. I do not agree that we should make them a special case within the legislation, or that their position makes them particularly deserving of special treatment within the technical obligations code over and above more commercial networks or, indeed, the position of the general public. I simply do not believe that a university or a library either should or would want to give people free rein to act unlawfully simply because the institution serves a cultural or educational purpose. That must be wrong.
	I also cannot accept the point about young people made by the noble Lord, Lord Clement-Jones. I do not want to paraphrase him, but I think he referred to young people as "free agents". They might be free agents in many respects, but not when they enter the library and not when they participate in the university system. There are codes of behaviour that they have to accept. What we are discussing, in ensuring that they do so, is how libraries and universities can take what we would consider to be reasonable and proportionate measures.
	Amendment 196 goes further and would allow anyone using anyone else's connection with or without their permission to infringe copyright with impunity. That does not stand up to scrutiny. It is only right that people should be expected to take responsibility for what happens via the connection they pay for, which almost invariably would be provided under contract with a prohibition on using the service or allowing it to be used for unlawful purposes.
	I want to try to address the question of libraries and universities, so I shall read certain points into the record. We should consider how libraries currently prevent unlawful behaviour. Where library internet access is offered on fixed machines, those machines would not have peer-to-peer software and are set up to block attempted downloads and installation of the software. For fixed library terminals, it is therefore unlikely that they would or could be used for peer-to-peer copyright infringement. Furthermore, library networks have firewalls which do not allow access to a number of sites, such as those containing Flash technology. These firewalls are generally for security rather than file-sharing reasons. In addition, libraries will have a filter system which should block access to known illegal sites. Obviously this is not a foolproof option since it would depend on the sites blocked.
	In common with commercial services, all library services should have a conditions-of-use policy which users have to agree to before getting access to the network. This will state that, for example, no unlawful activity including copyright infringement is permitted. Policy usually stipulates that legal liability for unlawful activities sits with the individual, not the library service.
	I have not yet got as much information as I would like on universities, but we are pursuing this and I will make this information available to noble Lords in-between these debates. The situation in universities is more complex than in libraries, not least because, generally speaking, they need and operate networks with much higher bandwidth. In principle, we do not see any problem in adopting the same approach as outlined for libraries, but we are currently involved in discussions with JANET, the UK's education and research network, and some educational establishments on how their networks operate and the actions they currently take.
	The noble Earl, Lord Erroll, mentioned a particular university; we will try to pursue that one. I hope that with the assurances and the explanation I have given, noble Lords will feel able to withdraw the amendment.

Baroness Miller of Chilthorne Domer: My Lords, the Minister mentioned fixed terminals in libraries having software to prevent peer-to-peer file-sharing, but universities are a very different case in that many students have their own laptops which they simply plug into the university's system. As the Minister has said that he does not think that universities merit an entirely different approach, have he and his department explored whether there is a way of framing the clause so that a different approach could be taken, or will he explore that before Report? I did not hear him say either of those things.

Lord Maxton: My Lords, I do not think that my noble friend replied to the point made by the noble Earl, Lord Erroll, about local authorities providing free internet access in their area, which is a much broader concept than that of universities or libraries, particularly as it will be wireless and therefore possibly more difficult to monitor. Unless there is an answer to this, it might clash with the Government's commitment to provide broadband internet to all areas. There may very well be rural areas where the only way to provide broadband is to provide a wireless point and then have the rest of the community picking up that free wireless access, or even paid wireless access. It would be very difficult, in my view, to monitor the legality or otherwise of that usage.

Lord Young of Norwood Green: My Lords, I shall try to address these points. I was trying to give the noble Baroness, Lady Miller, an assurance on universities when I said that we had not got all the information that we needed. We certainly do not think that we can exempt them, but I want to come back when we have fuller information. We will make that information available prior to Report.
	There are reasonable steps that institutions such as libraries can take on wireless connection to make it harder for people to access and use peer-to-peer sites and software. We do not pretend that such measures are 100 per cent effective and we do not require this. It is more a case of ensuring that the would-be infringer has to make a conscious decision and some effort to continue to infringe. We have written a letter in which we set out the types of measures that we would deem "reasonable". I do not know whether everybody has seen that letter, but we have made it available.
	On wi-fi supplied by local authorities-the Swindon example is the one that comes to mind-we think that it would be much more difficult in those circumstances for significant downloading to take place, because of bandwidth restrictions. If I can supply more information on that, I shall do so in trying to assuage the concerns of my noble friend Lord Maxton.

The Earl of Erroll: The Minister talked about taking reasonable steps. I seem to remember that at an earlier stage we proposed that the steps should be laid out and that there should be a defence that you had taken the reasonable steps as laid out by Ofcom in the code. The Government rejected that, saying that it was unreasonable, because then there could be all sorts of other defences. I presume that this means that the Government will rethink their attitude to the earlier amendments.

Lord Young of Norwood Green: My memory of that is slightly different. I do not think that we have ever said that, if we were advising people on what we regarded as reasonable measures and they took those measures, that would not in itself be a reasonable defence.

Lord Clement-Jones: My Lords, I thank the Minister for his reply on those amendments. We are making some progress. The Minister's reply was a deal more informative than it was last time. There is still a problem with the boundary being set where it has been placed, but if the Minister is saying that duties are going to be different depending on the ability of the subscriber to control the activities of the individuals using the service, then we are making some progress. He has acknowledged that it is probably more difficult for a university system to control what their users do than it is for a library in a fixed position, so to speak.
	The local government example is fraught with difficulties and I look forward to seeing what the Minister's letter says. I suspect that it will become more and more difficult to distinguish between the different types of service that are provided and to come up with different types of duties depending on whether it is proportionate or not for that service to take a particular action. It will be so ad hoc that it will be impossible for the administrators of these services to gauge whether what they are doing is reasonable in those circumstances. That is what worries me; this will be a precautionary block on the expansion of these services, particularly the kind of municipal service that the noble Lord, Lord Maxton, talked about. That is what some of us fear. We want to see a flourishing of these services, not a constriction.
	Little by little, we are teasing out more information from the Minister. He says that he is doing more research into how universities block access or are able to control the activities of their users. I hope that he will come back with more in his letter. He will also address the issue of local authority services, which is an important factor as well. All in all, we await his letter with bated breath. In the mean time, I beg leave to withdraw the amendment.
	Amendment 184 withdrawn.
	Amendment 185 not moved.
	Amendment 186
	 Moved by Lord Whitty
	186: Clause 13, page 14, leave out lines 41 to 45

Lord Whitty: I shall speak also to the other amendments in this group. I apologise to the Committee for not being here for my previous amendments, although that was no doubt some relief to my noble friend the Minister.
	I declare my chairmanship of Consumer Focus. My concern here is for the consumers of digital services and the process that this whole part of the Bill will put them through. My noble friend will know that I fundamentally disagree with the approach that the Government are taking in this respect. If the issue of the user abusing the system were classified as theft under the criminal law, the user would have to be taken to court and normal court procedures would apply. If it were a civil wrong, as indeed this is under copyright law, the proper process of righting that wrong against the abuse by a user would be through the civil courts.
	My main reason for tabling these amendments is that they would effectively delete the right of the system administrator to require ISPs to impose technical measures, subject to an appeals process, and substitute something that is closer to the normal process when a wrong is alleged through our legal system. That is to say that technical measures-sanctions-would not be applied until the courts system had agreed that they should be applied.
	I have never denied that there are rights accruing to the rights holders and that some process is needed in order that those rights are recognised. What I object to is the process, where it is only once the sanction has been agreed to be applied that there is an appeals process. I recognise that these clauses say that, if the appeals process is triggered, the sanction should not be applied, but that is a second-stage process as compared with the normal law.
	What I really want on record from the Government, and what I still do not understand about the attitude of the Government and the industry, is why the normal rule of law cannot apply to this form of copyright infringement, whereas it does apply to all other forms of copyright infringement. If somebody is complaining about a breach of patent, for example, they go to the courts. I want a clearer explanation from the Government of why that should not apply in this case. If we are to take this forward, we need that on the record and we need to know whether public opinion is prepared to accept it. There are serious problems at the point where this comes to be imposed, particularly if it is imposed against individuals rather than, as I would accept was necessary, against people who are making serious commercial money out of this process. I think that the Government will be faced with a serious backlash. I say to the opposition Bench that that may be an alternative Government, so all three Front Benches should take note of the politics of this. Part of the backlash will be about the fact that due or normal process has not been observed.
	I have no hope that my noble friend the Minister will accept my amendments, but they raise a fundamental principle, on which I find it difficult to defend the Government's position and which I think the Government, certainly at the point of application, are going to find difficult to explain to the British people once these measures are put into place and enforced. I beg to move.

Baroness Miller of Chilthorne Domer: My Lords, I strongly support the amendment tabled by the noble Lord, Lord Whitty. He has eloquently explained it and asked the Minister why there is not due process in the case of the digital economy approach that this Bill sets out. Everything that the noble Lord, Lord Whitty, has said underlines the glaring omission from this Bill of any rights given to users of the digital economy-the citizens. The Government could have chosen to draft a clause setting out the rights of internet users, because the digital economy should bring lots of rights to those who use it. Among those would be the right to have all the ways that fraud can take place on the internet explained. We have discussed that issue in the context of cybersecurity: people are not given good guidance about online security. Starting from that, there should be a whole hierarchy of rights that people should be given in this Bill but which are missing from it. It would be helpful if the Government were able to draft a clause like that, ready for Report, to insert the rights of citizens using the internet. Some of that would encapsulate the points made by the noble Lord, Lord Whitty.

Lord Howard of Rising: My Lords, some of these amendments mirror the discussion that we had on a similar point on the earlier provisions. Others go a little further into the form of the appeals system. I sympathise with the noble Lord's attempts to ensure that appeals against technical measures are sent into the courts system. They are, after all, potentially of a completely different order from infringement lists and notifications. I shall be particularly interested to hear the Minister's response to the points made by the noble Lord, Lord Whitty.

Lord Young of Norwood Green: These amendments essentially propose that there should be a judicial ruling before any action under the technical obligations is taken. We of course accept the need to ensure that people's rights are protected, but we believe that the appeals arrangements in the Bill do this. In practice, this means ensuring that the process is based on very firm evidence-I have previously stressed the point about having a clear audit trail-and that there is a clear and accessible way for subscribers to appeal, should they feel that they have been identified wrongly.
	I stress for the benefit of my noble friend Lord Whitty, whom I am pleased to see back in the Chamber, that I have already confirmed that it is our intention that the full appeals process should be exhausted before any technical measures are imposed on a subscriber-that was one of his major concerns, and I give him an explicit assurance on it. That means that, if a subscriber considers that the measure should not be applied and chooses to appeal, they will have the opportunity to have the appeal heard by a First-tier Tribunal, which is a judicial body, before a technical measure is imposed. Given those rights that we have identified, the fact that the appeals process has to be exhausted before any measure is applied and the fact that the appeal will be heard by a First-tier Tribunal, which is a judicial body, I do not believe that there will be a backlash. I say to my noble friend that the whole process is about ensuring that we educate and change behaviour before we arrive at that point. We have talked about the initial letters bringing people's attention to obligations of which they may not be aware.
	I shall see what I can do to assuage the concerns of the noble Baroness, Lady Miller, in relation to explaining online security measures to subscribers. I do not think that that is captured in the code at present, but it is clear that we want it to be part of what accompanies the initial obligations in the first letter. As regards the point that my noble friend Lord Whitty made about a court hearing, there is a real danger of moving more people into the courts system than we need to if we take that road. We want a fair, open and transparent process. We do not want to impose any technical measures until we know whether the initial obligations about which we have talked will succeed or fail. In the event that they fail, we want to ensure that, as I said, we exhaust the appeals procedure and keep people out of the courts.
	I know that this is a measure that my noble friend Lord Whitty considers to be fundamental, but I do not think that it is appropriate or practical. On the surface, requiring a court to make the decision whether or not to apply technical measures may seem a reasonable safeguard for consumer interests; certainly we have a duty to ensure that the position of the ordinary subscriber is properly protected. However, in practice, we believe that this would be slow, cumbersome and expensive, causing unacceptable delay when speed is needed, and probably causing additional stress to subscribers-after all, a court ruling is no small thing. It would also risk putting a burden on the courts. We believe that we have established a procedure that is open, transparent and fair. It ensures that the full appeals process is exhausted before any technical measures are imposed on a subscriber and that, when they make their appeal, it is heard by a First-tier Tribunal, which is a judicial body, before any technical measure is imposed. Although we may not agree on this, I trust that, in the light of my explanation, my noble friend will feel able to withdraw the amendment.

Baroness Howe of Idlicote: Can the Minister explain a little more about the costs involved? He referred to the costs of going to a court of law being expensive, which I would have thought is a very accurate comment. Are we right to assume that, before that point is reached, the Bill provides for an adequate place where a defendant, if you like, can raise the whole issue and have what he has to say taken into consideration without having to pay vast amounts? That is important at that stage.

Lord Young of Norwood Green: I thank the noble Baroness for that question. We have been down this road before but it is worthy of a quick repetition. We have said that we do not want to deter people from making an appeal. There should be a fee but it should not be a deterrent fee. It should deter frivolous appeals. If appeals are successful, the fee should be refundable. It would be a lot less in our view than involving the courts in the process.

Lord Lucas: Can the Minister confirm my understanding of how the process will work once we are in the technical measures regime? My understanding is that we will still have the first stage of the old regime. In other words, when a subscriber first trips over the threshold, they will receive the explanatory warning letter, which is contained in the first sections. It is only when they commit a subsequent infringement that they will be into the technical measures section. Technical measures are not part of the first notice that a subscriber receives.
	The noble Lords talks about the appeal process being exhausted. Does that mean that, if the appeal has failed, technical measures will be imposed or that, from that point on, technical measures can be imposed? As I understand it, it is the first of those. I also want to ask whether the Minister has thought any further about what assistance will be given to citizens in terms of the technical aspects of their defence in front of a tribunal. How will they be assisted to show that their computer contains no infringing material or that their network has not been used in ways that are inappropriate? I will understand if the Minister has nothing further to say, but if he has something further to say, it would be helpful.

Lord Young of Norwood Green: I am just trying to see what detail I have. The initial obligations procedure has to be gone through, so there may be a first, second or even third letter before we reach the technical measures. We are clear about that. In those initial letters, we will be advising people of the security measures that they can take. We have debated whether it would be a reasonable defence in an appeal if they validate that they have taken those measures. In our view it would be. I do not think that I can give a more detailed explanation at this juncture. I hope that, in the light of my explanation, the amendment can be withdrawn.

Lord Whitty: My Lords, I will in a minute withdraw the amendment, which I did not have any great hope of the Government accepting. There are some principles involved here. The Government have to take on board the fact that the users have no rights under this Bill. If the Government were prepared to engage and alter copyright law, possibly even using Clause 17, which we shall be debating in a minute, to create a fair-use clause in copyright law in this country-such a defence exists, albeit not in an entirely satisfactory form, in United States law-the consumer would clearly have some protection. At the moment, all the rights are on the part of the copyright holder. The obligations are on the ISP, with some protections, and there are no rights for the user. Normally, those rights would have been protected by the courts, but instead we are inventing a new tribunal system, which my noble friend says is judicial. In almost all other circumstances, the court would be used for that process; enforcers go to a court to obtain a sanction for their moves to be imposed. I still do not believe that there is a clear case for having a judicial process separate to what applies in all other forms of copyright law.
	I accept where the Government are, but essentially the balance in the Bill does not give any rights to the user. As the noble Earl, Lord Erroll, said, the Bill does not even indicate how subscribers can protect themselves with what would be regarded as a reasonable defence. The balance is almost entirely on the side of the copyright holder. I am not convinced that this is the right approach, as my noble friend knows. If the Government persist in their approach, they need to explain it better and much more clearly.
	My noble friend denies that there would be a backlash. Without a more balanced Bill, there will be a backlash. I remind leaders of political parties, so far as they are represented in this House, that in the Swedish elections after the piracy case nearly a quarter of all voters under 25 voted for the Pirate Party. Their votes were completely wasted, but the mainstream parties had alienated those voters. There are bigger social and political issues involved in this than the Government are facing up to.
	We want to alter behaviour. The aim must be to get the majority of people on to legal systems, but to do that will require time and investment in developing those systems, making them more appropriate and getting rights holders to work through them, rather than resorting to an abnormal method of imposing sanctions.
	I shall return to this issue at a later stage, perhaps in a more comprehensive way, taking on board some of what my noble friend the Minister said about the Government's determination to set up a separate tribunal system. At the moment, even with that tribunal system and even accepting what the Minister said about the processes of that system being equivalent to those of a court, I do not think that the balance is right. It would be appropriate to return to this matter at a later stage. In the mean time, I beg leave to withdraw the amendment.
	Amendment 186 withdrawn.
	Amendments 187 to 193 not moved.
	Amendment 194
	 Moved by Lord Clement-Jones
	194: Clause 13, page 15, line 36, at end insert-
	"( ) provision requiring a copyright owner to indemnify an internet service provider for any loss or damage resulting from the owner wrongly accusing a subscriber of an infringement of copyright;"

Lord Clement-Jones: My Lords, this amendment could easily have been grouped with an earlier amendment to Clause 8, because it is similar in form. At the moment, there is a requirement for a provision for such an indemnification resulting from the owner's,
	"infringement or error in relation to the code or the copyright infringement provisions".
	This greater injustice would need to be rectified. The technical measures would have been more drastic than anything envisaged in the initial obligations code. This is more vital in the technical measures code than it would have been in the initial obligations code. I hope that the Minister will consider this very carefully because it seems to us to be something which would prevent trigger-happy behaviour by copyright owners. They would have to think quite carefully in those circumstances as fairly drastic action-particularly temporary account suspension-would be available to them through the technical measures code. I beg to move.

Lord Young of Norwood Green: My Lords, the amendment would provide for indemnification of internet service providers against any damage they might suffer from a wrongful accusation made against a subscriber by a copyright owner. We understand and share the concern of the noble Lord, Lord Clement-Jones, in relation to this. I would suggest, however, that this is already properly catered for within the Bill, and indeed within the preceding text. This allows the code to provide for indemnification for an internet service provider for loss or damage from a breach or error by the copyright owner in relation to the code or the Bill's provisions. In my view this would cover an error in relation to the identity of an infringer. To reinforce this further, the code allows for copyright owners to be made to indemnify ISPs in the event that the ISPs suffer loss as a result of a failure by the copyright owner. In producing the code it would be an option for stakeholders to require other undertakings by copyright owners if it was deemed appropriate.
	I share the concern of the noble Lord but I hope that in the light of my explanation and assurances he will feel able to withdraw the amendment.

Lord Clement-Jones: My Lords, I thank the Minister for that reply and I am delighted that he shares my concerns. His clarification was very helpful and is on the record. I hope that the code and the provisions of the Bill will be interpreted accordingly. I beg leave to withdraw the amendment.
	Amendment 194 withdrawn.
	Amendments 195 to 197 not moved.
	Clause 13 agreed.
	Clause 14 : Enforcement of obligations
	Amendment 197A
	 Moved by Lord Clement-Jones
	197A: Clause 14, page 16, line 9, leave out "£250,000" and insert "£10,000"

Lord Clement-Jones: My Lords, this amendment is designed to probe and clarify the basis for and the amount of the penalty under Clause 14. The wording of the Bill appears to be based on the enforcement regime currently in place for regulation of premium rate services. This is not a relevant or appropriate basis for enforcement in relation to Clauses 4 to 17. The initial penalties provided in the Communications Act for premium rate services regulation were much lower and have been changed following evidence-based consultation justifying the rationale for increasing the amount. It is wrong to set penalties relating to this entirely new and different purpose by reference to what may now be appropriate for premium rate services regulation following bedding in and operation of that regulation over many years.
	It would be wrong also for internet service providers to be subject to such massive fines given that their involvement in any copyright disputes can be only as bystanders to actions between copyright owners and subscribers. We have had that debate about ISPs and their duties as a communications channel.
	This amendment is also designed to probe for information from the Government as to how Ofcom is to be able to apply the Communications Act powers invoked here-and throughout the Bill-to copyright owners who are not themselves communications service providers and so not obviously subject to Ofcom's jurisdiction. We understand that the provisions relating to enforcement obligations in this clause are not relevant to copyright holders but wish to highlight the absence of any powers for Ofcom to regulate copyright owners within this whole process. I beg to move.

Baroness Howe of Idlicote: My Lords, the sum in the Bill seems to be an enormous amount of money. I think that the £10,000 set out in the amendment is more proportionate. It would be helpful if the Minister could say in his reply how this sum was arrived at-it may be there is some justification for it. I will await his reply before coming to any conclusion.

The Earl of Erroll: My Lords, this is an enormous sum for small internet service providers. The market has some very big players and I am quite sure that £250,000 will be neither here nor there to them. They will just pass it on to their people. However, there are some very small people in this market who are very dedicated and who provide very select services and this will just wipe them out. The Minister may say that Ofcom would not dream of levying that scale of fine, in which case we should make it conditional that fines must be proportionate to turnover. Given the power, people end up bullying people and that would be very dangerous. If we leave this enormous sum in the Bill, it will be misused.

Lord Howard of Rising: My Lords, my amendment in this group removes the power of the Secretary of State to raise the maximum penalty by statutory instrument. As has been said, £250,000 is a great deal of money. It is hard to imagine that this sum will not be a sufficient deterrent against an internet service provider breaching the obligations of the code. If such a sum turns out to be inadequate in enforcing compliance, the priority should be to examine what is so hard to follow in the code. For an internet service provider to take a £250,000 hit rather than implement technical measures or send notification letters suggests there is something very wrong with the process. That is where the Government should seek a solution.

Lord Faulkner of Worcester: My Lords, I thank those noble Lords who have taken part in this debate but I am afraid we do not agree with any of the points that have been made. We do not think that Amendment 197A would be regarded by anyone as one which reinforces the seriousness of what this legislation is trying to achieve including, I suspect, most internet service suppliers if they were being frank. We must take into account the sheer scale of the companies involved. They will range from medium-sized companies to some multinational corporate giants.
	A point to be borne in mind is that this is the maximum penalty. We would not expect it to be applied too often-perhaps not at all-to any smaller bodies which find themselves in contravention. The text makes it clear that this has to be both appropriate and proportionate to the contravention. However, it must be right to retain the deterrent effect of a significant sum.
	Amendment 198 would effectively set the maximum penalty in stone for all time. We do not believe that it would be appropriate to do that either. The maximum penalty is a significant one of £250,000, but against that must be set the huge scale of the bodies being regulated and the need to provide a route through which such maximum penalties will remain an appropriate deterrent into the future. What is certainly a hefty figure now may not seem so in 10 or 20 years and we should take care when a specific sum is mentioned to allow that sum to be changed as circumstances change.
	The noble Lord, Lord Clement-Jones, claimed that the £250,000 penalty was out of line with penalties for similar offences elsewhere. We would not agree with that. It is in line with other penalties within the Communications Act 2003 and is the same as the maximum penalty for breaching a condition relating to premium rate services. It is true that there are other penalty levels in the Communications Act, including the £10,000 suggested by the amendment. There is also in the Act the much steeper maximum penalty for breach of a Section 45 condition-these are conditions of entitlement to provide networks or services-of 10 per cent of annual turnover. We agree that such a penalty would not be appropriate here. However, I am satisfied that we have got it just about right. It is a maximum penalty and Ofcom is required to take into account appropriateness and proportionality.
	The noble Lord raised the question of Ofcom's jurisdiction over copyright owners. He is right that Ofcom is a communications regulator and does not have jurisdiction over copyright owners. In this instance, the jurisdiction that it has is over ISPs. It is in that respect that the Act will apply.
	On the amendment of the noble Lord, Lord Howard of Rising, we take the view that any future changes to penalty levels should be made by statutory instrument subject to affirmative procedure and therefore will be approved by Parliament rather than set in stone. I hope that, after what I have said, the noble Lord will feel able to withdraw his amendment.

Lord Howard of Rising: Perhaps I could make one point to the Minister. If there is a maximum penalty of £250,000, it is not set in stone for all time; it is set until such time as Parliament chooses to have a different figure. There will be nothing to stop the Minister introducing primary legislation to change the figure if that is thought appropriate. We will come to this point when we discuss Clause 17. My amendment states that this decision should be left to Parliament and not to the Minister.

Lord Faulkner of Worcester: My point, my Lords, is that changes in the level of penalty will be the subject of an affirmative instrument, so Parliament will have a say.

Lord Whitty: My Lords, perhaps I may pick up on one thing that the Minister said, which was that Ofcom does not have jurisdiction over the rights holders. However, rights holders are the trigger for this process, while Ofcom is the regulator. One can conceive of situations where rights holders would abuse their position by putting responsibility for behaviour either on the ISP or on the subscriber who is the target of intervention. If Ofcom has no power over them, who does? We are talking about changing behaviour, but where in the Bill is the control over the behaviour of the rights holders?

Lord Clement-Jones: My Lords, I thank the Minister for his reply. It is interesting that we had his velvet glove when he talked of a graded response, but now we get the mailed fist of the £250,000 maximum penalty. It reminded me of a Home Office debate about the deterrent effect of a £250,000 fine. To my ears, it sounds wholly disproportionate. We will take away the Minister's hard-line rhetoric and consider it carefully. It seems out of kilter with the aim of creating a scheme that is acceptable across a disparate industry, including to ISPs and copyright owners, and that builds consensus, certainly within the code. This extremely heavy penalty will not induce good behaviour; indeed, I suspect that it may induce bad behaviour. Time will tell. In the mean time, I beg leave to withdraw the amendment.
	Amendment 197A withdrawn.
	Amendment 198 not moved.
	Clause 14 agreed.
	Clause 15 : Sharing of costs
	Amendment 199
	 Moved by Lord Howard of Rising
	199: Clause 15, page 16, leave out lines 31 to 34

Lord Howard of Rising: My Lords, I will try to be brief on this group. Most noble Lords agree that costs should not fall unnecessarily on internet service providers. It is the copyright owners who seek these provisions and it is right that they should pay the bulk of the costs. That is doubly true because of the likelihood that any costs falling on internet service providers will be passed directly to their customers. I hope that, when deciding on the cost division, either initially or when any future orders are made, the Secretary of State will have regard to any evidence suggesting that subscription rates are rising as a result of the regulatory burden falling on the internet service providers. I also hope that the Minister will be able to tell us whether the cost division eventually decided on in the statutory instrument for the initial obligations code will be the same as for the technical obligations code. Are there any considerations that make him think that internet service providers or rights holders should pay a higher or lower percentage in any cases? I beg to move.

Lord Colwyn: My Lords, should the amendment be agreed, I would not be able to call Amendments 200 to 202 inclusive, or Amendments 206A and 207.

The Earl of Erroll: My Lords, Amendment 206 refers to,
	"provision to prevent costs being passed onto subscribers in the form of higher subscriptions".
	It was tabled by the Conservative Front Bench and I can quite see why. Someone has to pay for this. We have an interesting situation where the rights holders will benefit and hope to receive more money, but the internet service providers, who will have to do much of the enforcement, including sending out letters, and who will carry the costs, will receive no benefit. There is no suggestion that the rights holders should divvy up the benefits that will come from the Bill.
	The ISPs will have to recoup the extra cost. They are in the business of business and are not making hugely disproportionate profits. It is a competitive market, so costs have been kept down. Therefore, we will see the monthly cost of internet service provision going up. That will be broadcast in bright lights to subscribers. If the Opposition hope to come to power, they do not want this happening on their watch. They do not want it said that they supported the passing on of these costs. It will be an unpopular measure. I would not quite liken it to the poll tax, but it is amazing what can bring people down-there is nothing like being dramatic about these things. My point is that the cost will be passed on to subscribers: one cannot expect the ISPs to absorb it. I entirely agree that we must protect copyright; I am not against copyright and rights holders. However, this is not the right way to proceed, because the unintended consequences are far more wide-reaching than people have allowed for.

Lord Young of Norwood Green: My Lords, it is worth setting out why Clause 15 is part of the Bill. The apportionment of costs is, not surprisingly, one of the most contentious parts of the process for industry; it is an area where it is not realistic to expect the different industry parties to agree. Both copyright owners and internet service providers are adamant that their view of who should pay is the right one and there is little common ground between them. That is why we decided to include the sharing of costs as part of the Bill, rather than leave it as a matter for the code, which might have made reaching agreement on the code an intractable problem.
	We have already discussed in Committee Amendments 200 to 206 and the principle of cost sharing. The draft statutory instrument with which we provided your Lordships set out our working assumption that copyright owners should meet 75 per cent of the costs-both those incurred by ISPs in complying with the initial obligations and the other costs that will arise for Ofcom and in relation to the appeals processes. We are quite clear that the bulk of the cost should apply to the copyright owners. Before the Horsemen of the Apocalypse ride in with somewhat melodramatic comparisons with the poll tax, I stress that in this working assumption ISPs would meet the remaining 25 per cent of those costs. We have been clear that in our view the bulk of the cost should be met by the copyright owners as the main beneficiaries of the process, while leaving internet service providers-I stress this-with a strong incentive to ensure that they keep their costs to the lowest effective level.
	Finally, let me address the point about seeking to prevent internet service providers from passing costs on to their subscribers. This just is not practical. It is not appropriate for the Government to dictate how any of the industry parties should cover their costs or to prohibit any particular route. I suggest that the amendment would, in practice, be virtually impossible to police and could lead to endless disputes.
	I shall spend some time on how this will be paid for. It will be paid for by industry through a flat-rate fee that copyright owners will pay, which will be set in a way that incentivises both copyright owners and ISPs to keep the process efficient and cost-effective. It is only right that copyright owners should bear the cost of infringement identification and any court action that they choose to take. They will also have to pay a flat fee to an ISP for each notification that the ISP has to process. However, the fee will be set at such a level that it will not cover all the ISP's costs. Placing part of the costs on ISPs should ensure that the systems that they put in place to comply with these obligations are both effective-in other words, delivered rapidly-and cost-efficient. It will also provide ISPs with incentives to minimise the number of notifications that they receive either through commercial content deals or by taking voluntary action to limit file-sharing on their network. In light of that explanation, I hope that the noble Lord will withdraw the amendment.

The Earl of Erroll: I think that trying to limit file-sharing on the network is totally unfair. File-sharing is a very good technology for offloading load from certain servers. It is only when it unlawfully breaches copyright that it matters. The concept that file-sharing should be limited on your network-given, for instance, that Skype traffic can look like file-sharing traffic-is a very dangerous one to have in this Bill.

Lord Howard of Rising: I thank the Minister for his reply. I was interested to hear the comments of the noble Earl, Lord Erroll. I am not sure that we would have demonstrations in Trafalgar Square about this, with people being thrown into fountains, but who can tell? The Minister said that he did not think that costs would be passed on to the public by internet service providers. I think that that is unrealistic. If you increase a business's overheads, sooner or later they will be passed on. Of course, a business might decide to absorb them initially, but over the longer term that cost will be paid by someone and it will not be the business; it will be paid by those paying for the service. I hope that the Minister will bear that in mind and perhaps comment on it briefly before I withdraw the amendment.

Lord Young of Norwood Green: Far be it from me to make an absolute prediction-"Never say never", they say. I stress that internet service provision a highly competitive environment. We are not dismissing the fact that copyright owners should bear the bulk of this. We are saying that there should be an incentive on internet service providers to ensure that their part of the bargain should be to have the most efficient and cost-effective process. Which way this will go is an even bet. It is reasonable to say that we do not think that these costs will be passed on, although we do not think that we could find a way of prohibiting that. Our view is that, in a competitive environment, ISPs are capable of absorbing those costs, although I confess that in reality only time will tell. In return, I ask that the noble Lord, Lord Howard, reflects on the fact that this is a very competitive market.

Lord Howard of Rising: Maybe we can get together in a few years' time to see what has happened. In the mean time, I beg leave to withdraw the amendment.
	Amendment 199 withdrawn.
	Amendment 200 not moved.
	Amendment 200A
	 Moved by Lord Faulkner of Worcester
	200A: Clause 15, page 16, line 34, at end insert-
	"( ) Any provision specified under subsection (1) must relate to payment of contributions by one or more of the following only-
	(a) copyright owners;
	(b) internet service providers;
	(c) in relation to copyright infringement disputes or subscriber appeals within the meaning of section 124E or 124J, subscribers."
	Amendment 200A agreed.
	Amendments 201 to 206 not moved.
	Amendment 206A
	 Moved by Lord Faulkner of Worcester
	206A: Clause 15, page 17, line 7, at end insert-
	"( ) No order is to be made under this section unless a draft of the order has been laid before Parliament and approved by a resolution of each House."
	Amendment 206A agreed.
	Amendment 207 not moved.
	Clause 15, as amended, agreed.
	Clause 16 : Interpretation and consequential provision
	Amendment 208 not moved.
	Amendment 209
	 Moved by Lord Lucas
	209: Clause 16, page 17, line 14, at end insert-
	""copyright infringement" and "infringement of copyright" has the same meaning as in the Copyright, Designs and Patents Act 1988"

Lord Lucas: This is an attempt to be helpful, as are all my amendments, but this one purely so. I beg to move.

Lord Faulkner of Worcester: I can be as helpful as the noble Lord, Lord Lucas. The amendment would specify that "copyright infringement" and "infringement of copyright" would have the same meaning as in the Copyright, Designs and Patents Act 1988. However, those two terms are not defined in that Act, so nothing can be gained by accepting his amendment. At any event, if a copyright owner decides to take civil action against a person who has infringed his copyright, he will do so in the context of that Act. I hope that the noble Lord feels that those are reasonable grounds for his withdrawing the amendment.

Lord Lucas: Yes, my Lords.
	Amendment 209 withdrawn.
	Amendment 210
	 Moved by Lord Howard of Rising
	210: Clause 16, page 17, line 36, leave out "entirely or mainly"

Lord Howard of Rising: This is a brief probing amendment to highlight a possible drafting confusion. The drafting of the definition of "internet access service" has led to concern that mobile operators might be excluded permanently from these provisions. Limiting the provisions to impact only on those "entirely or mainly" providing internet access will surely discount mobile providers which primarily provide telephone services. If it is the Minister's intention that the definition should apply only to the internet service part of a telephone service, when would the "or mainly" flexibility be needed? I beg to move.

Lord Faulkner of Worcester: The amendment would remove the qualifying words "entirely or mainly" from a definition of an internet access service. Although it appears to be a simplification, it could have the effect of excluding organisations that offer such a service as the main part of their business as opposed to their entire business. We do not think that we should facilitate that situation. The current wording is designed deliberately to apply only to electronic communication services whose business is wholly or predominantly the provision of internet access-in effect, ISPs. The amendment would make the obligations apply only to an electronic communications service that provides a service to subscribers that involves only access to the internet and the allocation of an IP address. That risks exempting ISPs from the obligations if acting as an ISP is not the sole activity in which they engage. We do not think that that is right. We have no intention of catching organisations or businesses that happen, as part of their normal operations, to allocate IP addresses to their staff, for instance, but we think that it is right that those organisations that, as a business, provide internet access and allocate IP addresses should be covered by this legislation. I suggest that we should focus on where the problem is likely to reside on those networks operated by internet service providers whose business either wholly or mainly consists of access to the internet. I hope that, on the basis of this explanation, the noble Lord will feel able to withdraw his amendment.

The Earl of Erroll: Before we move on, may I just ask a quick question? Does that therefore solve the problem of the libraries, the local authorities and everyone else, because their business is not mainly to do with providing services-oh, this is about the obligations in the code, is it not? I think that I am talking off the point. Sorry.

Lord Howard of Rising: Well, the noble Earl has produced a most interesting point and I shall look forward to hearing what the Minister says about it before I withdraw.

Lord Faulkner of Worcester: I do not think that the noble Lord will hear the answer immediately, as I will need to take advice, but my understanding is as the noble Earl admitted at the end. He was a little bit off the point with his intervention, but if I am wrong I will of course correct myself and inform the Committee.

Lord Howard of Rising: I thank the Minister for his remarks and I beg leave to withdraw the amendment.
	Amendment 210 withdrawn.
	Amendment 211 not moved.
	Clause 16 agreed.
	Clause 17: Power to amend copyright provisions
	Amendment 211A
	 Moved by Lord Young of Norwood Green
	211A: Clause 17, page 18, line 19, leave out from "reducing" to end of line 22 and insert "any infringement of copyright by means of the internet if satisfied that-
	(a) the infringement is having a serious adverse effect on businesses or consumers, and
	(b) making the amendment is a proportionate way to address that effect."

Lord Young of Norwood Green: My Lords, we move now to government Amendment 211A which is grouped with Amendment 211B and other amendments to the eagerly anticipated Clause 17. Before speaking to the government amendments, I thought it would be worth while highlighting why this clause is included in the Bill, and what we hope to achieve with it. Clause 17 introduces a power to amend the Copyright, Designs and Patents Act 1988 by means of secondary legislation. If it is considered-and I stress considered-that such an amendment is necessary to address problems around online infringement of copyright, this power is a necessary tool to provide future proof supplementary to the action that is being taken in Clauses 4 to 16 that this House has already debated.
	Illegal peer-to-peer file sharing is-I say this for the benefit of the noble Earl, Lord Erroll-the biggest problem facing our creative industry today, but it may not be the biggest problem tomorrow. We need to be able to respond quickly and flexibly if new methods of infringement grow in significance and start to damage those industries. Clause 17 aims to provide this important flexibility. As with any delegated power, Clause 17 has attracted significant interest from parliamentarians and committees of this House. As I will explain, however, the Government have listened to the concerns that have been raised by noble Lords and committees, and we have proposed some substantial amendments to address these. These government amendments clarify the scope of the power, and strengthen the safeguards that surround its use. I shall explain these by moving onto the detail of the amendment laid in the name of the noble Lord, Lord Mandelson.
	First, we propose the introduction of a clear threshold that must be met before the power in Clause 17 may be used. This threshold requires that the power may be used only if the infringement in question is of a sufficiently damaging nature as to warrant intervention. That intervention must be proportionate to the threat it is intended to address. This assessment must form part of an explanatory report which will be laid before Parliament for 60 days under the so-called super-affirmative resolution procedure.
	Secondly, the amendment will make it crystal clear that all persons likely to be affected by an order under this power should be consulted. The results of that consultation and an assessment of why proposed action is proportionate will also form part of the explanatory report which will be put before Parliament.
	Finally, the super-affirmative resolution procedure requires that the Government cannot continue with any proposed use of the power if a committee of either House recommends that they do not. Such a recommendation would have to be overturned by a vote of the House before-and I stress before-the order could progress any further. These amendments will ensure that Parliament has sufficient time to consider the implications of any order made under this power, while still enabling the Government to respond quickly and flexibly to developments that affect our valuable creative industries.
	In conclusion, I would like again to reassure the House that we have listened to the points raised, including those by a committee of this House. I hope your Lordships will agree that the amendments we propose here address their concerns in a very serious way. I beg to move.

Lord Puttnam: Perhaps I may speak to my Amendments 211C to 211J, as amendments to government Amendment 211B, and Amendment 212 in the same group. Some while ago, my noble friend Lord Bragg and I looked very carefully at what was originally proposed by the Government, and considered that we were perpetually trying to sail between Scylla and Charybdis. Scylla is, frankly, turning a blind eye to file sharing and letting it continue much as it is, with all the damage that is consequent; and Charybdis is the original proposal from the Government that we did not feel we could happily go along with.
	The utilisation of the super-affirmative resolution procedure is not that usual, but I would commend it to the House. It is a very effective piece of legislation. We used it during the passage of the Communications Bill 2003. It offers significantly greater safeguards than the normal affirmative resolution procedure and has other advantages. The purpose of the amendments that my noble friend Lord Bragg and I put down is to increase the period of time for consultation from 60 to 90 days, which we feel is appropriate. These are complex issues in a difficult and diverse industry and we feel that a 90-day period is more suited. Amendment 212 is in the same spirit.
	I could speak at some length about this. A lot of work has gone into it. I think that the industry for the most part sees this as an acceptable resolution to what has been a very vexed problem. I hope only that my noble friend Lord Whitty, the noble Lord, Lord Lucas, and others I respect in this House will see this as a genuine attempt to come up with an answer to an almost implacable problem.

Lord Howard of Rising: My Lords, as I see it, there are two areas of concern about this clause-policy and procedure. I shall address policy first. Her Majesty's Government are asking for extremely wide powers for the purposes set out in government Amendment 211A. It is understandable that the Government seek powers to future-proof, and that these will necessarily be vague given that the purpose of this clause is to deal with unknown problems and to cope with future technology. However, the power being demanded is quite out of proportion to the potential problems.
	At various moments during our debate, Ministers have pleaded with the House to keep things in perspective. I urge Her Majesty's Government to do the same. We are dealing in this clause with the prevention or reduction of online infringement of copyright. To give the Secretary of State such huge powers as are being demanded in order to deal with copyright infringement would be unreasonable and, as I have already said, totally out of proportion.
	Effectively, entirely at the discretion of the Secretary of State, a large amount of law can be amended-the whole of Part I of the Copyright, Designs and Patents Act. One can take hypothetical examples too far, but I do not think that I am doing so when suggesting that a future Secretary of State might decide to amend significantly existing rights to copy or broadcast works because of an unfortunate rise in infringements. Other sections, such as those covering the terms of licences, could be materially amended in order to address copyright infringement.
	Should some unimaginable situation arise, or there be infringements beyond what could reasonably be expected, there is nothing to stop the Secretary of State returning to Parliament and seeking primary legislation to deal with the problem. To expect Parliament to give the Secretary of State the discretion at will to make laws as far-reaching as the amendment makes possible-I will come to procedure in a minute-to cope with online infringement is expecting Parliament quite unjustifiably to surrender its role of holding the Government to account. It demonstrates a contempt for Parliament which has been demonstrated all too often by this Government.
	There are protections in Clause 17 against improper use, but they are not as strong as might at first appear, and would not provide the restraint necessary for such wide-ranging powers. The new threshold test that the measure must be proportionate is nothing but reassuring flannel, as everything that the Secretary of State does should anyway be proportionate. The restriction on amending or creating criminal offences is necessary, but presumably does not cover creating or modifying provisions allowing for an injunction, which is a civil issue, but which can still impose significant restrictions on both companies and individuals.
	The Government's justification for asking for those dictatorial powers is that the procedure for putting them into effect would act as a restriction and give Parliament the opportunity to hold Ministers to account, as the noble Lord, Lord Puttnam, pointed out, but the super-affirmative procedure suggested by the Government in no way answers the concerns felt by many, despite the noble Lord's comments. The Delegated Powers and Regulatory Reform Committee did its usual sterling job and called attention to Clause 17 in its original report on the Bill. It is difficult to argue with its recommendations.
	In its most recent report, the committee states unambiguously that,
	"the insertion of a super-affirmative procedure cannot bring a misconceived delegated power within the bounds of acceptability".
	The committee leaves the final decision to the House, but I continue to hold that the Government have not met the legitimate concerns held by many in this House and that the procedures offered by the Government do not give adequate protection against the huge powers for which they are asking. The super-affirmative procedure is not a compromise between secondary and primary legislation. The DPRRC notes that it is,
	"entirely exceptional, justified only by unusual circumstances".
	With the best will in the world, I cannot see how online copyright infringement is in any way exceptional. It may be undesirable; it may be something that this House should be trying to do its best to stop; but I do not think that it is exceptional.
	With the super-affirmative process, all the flaws of secondary legislation remain. There is no chance to insist on amendments. Although there is no formal bar against throwing out a super-affirmative in its entirety, I am sure that I do not need to remind your Lordships how very rarely this House chooses to take such a drastic step. Statutory instruments have been thrown out of this House only three times since the war-one of which was at the instigation of the noble Lord, Lord Clement-Jones. Some may say, "It is all right, we have the House of Commons", but in fact, only eight statutory instruments subject to the negative procedure have been annulled in the House of Commons since World War Two. It is very rare for affirmative statutory instruments to be defeated in the House of Commons, the last occasion being in 1978.
	I end my comments on the procedural mishmash that the Government seek to insert into the Bill by again citing the committee's report, which expressed things perfectly when it stated:
	"The super-affirmative procedure is not an adequate substitute for Parliament's established procedures for dealing with matters of complexity and importance, through primary legislation".
	I therefore entirely reject Amendment 211B. If the Government are unable to define the purpose of Clause 17 in such a way as to make a normal affirmative procedure acceptable to this House and to the Delegated Powers and Regulatory Reform Committee-and I do not consider that Amendment 211A does that-they should remove Clause 17 entirely and proceed against future online copyright infringement by primary legislation.
	The amendments tabled by the noble Lord, Lord Puttnam, although entirely praiseworthy in their attempt to further parliamentary scrutiny, do not really answer the problem.

Lord Puttnam: I just wanted to make a point that I probably should have made in introducing my amendments. Having sat in this Chamber for 13 years, I know the simple reality of how long it takes to bring primary legislation before this House. We have to find some means of ensuring that primary legislation can reach the House at such a time as to deal with the problem. Recently, a complaint against Microsoft has taken 10 years-10 years, my Lords-to come to a satisfactory conclusion. Those 10 years could be the end of the intellectual copyright business in the UK if primary legislation cannot deal with massive infringement. We do not have 10 years. The noble Lord will hope-he may possibly even expect-to find himself in government, possibly this year. I promise him that this type of solution to this type of problem will be something that a future Conservative Government may well find themselves seeking. I hope very much that, in rejecting it, he has taken that thought on board.

Lord Howard of Rising: I thank the noble Lord for his comment, and I sympathise hugely with what he is saying, but I also feel that the supremacy of Parliament is more important. I also think that it is always possible to fast-track primary legislation. It does not need to take 10 years. Indeed, I believe that the Government want to see this Bill through fairly quickly, and that that will be achieved.
	I shall comment briefly on my amendment in this group, which was tabled several weeks ago, and a lot of water has flowed under the bridge since then. We were willing to consider the possibility that Clause 17 could be used to implement some steps that the Government were developing that had nearly been completed but were not quite ready to be included in the Bill. The amendment was to give the Government a period of grace to complete any formal stages that such provisions might have been going through, such as a compulsory period of examination at the European level.
	It has become clear during the past weeks that there are in fact no such provisions. The Government do not know what Clause 17 would be used for, and they have no plans for addressing any other type of online infringement than those set out in Clauses 4 to 16. We are now inclined to the view that Amendment 213 would not be helpful to copyright holders, internet service providers or any other person involved in the industry. It would be actively prejudicial to the interests of Parliament. I shall therefore not be moving it when we reach that point in our proceedings.
	We sympathise with the ambition behind Clause 17. If the Government could find a way of saying the same thing that did not show quite such contempt for Parliament-we would need to see considerable movement before Clause 17 was in an acceptable form-we might take a different view.

Lord Whitty: My Lords, I am not sure whether my intervention is appropriate here or whether it should have waited until the clause stand part debate to which my name is attached. I promise the Minister that I will not say it twice.
	I deeply appreciate the efforts that my noble friends Lord Puttnam and Lord Bragg have put into this and the Government's acceptance of it. I would unequivocally say that if something like Clause 17 remains part of this Bill, the super-affirmative resolution set out in these provisions would give significant protection and significant retention of the scrutiny of Parliament in relation to the implications of Clause 17. I would therefore be more welcoming of these amendments than is the noble Lord, Lord Howard of Rising.
	The fact remains that Clause 17 raises anxieties that are well beyond the areas we have already discussed. One of the original justifications from the Minister's department for Clause 17 having the wide range that it did was that Clauses 4 to 16 only dealt with unlawful peer-to-peer file sharing. As a result of the post-consultation amendments to the legislation put forward by the Government, those clauses potentially apply to all forms of copyright infringement. I queried that at an earlier stage and I still think it would be better, since the procedure relates to unlawful peer-to-peer file sharing, if it were more narrowly defined in those earlier clauses. However, if it is not to be, one of the main justifications for the wide range of Clause 17 disappears.
	I re-declare my interest as chair of Consumer Focus. We know worldwide that there are always pressures from different forms of copyright owners to extend the powers and rights of copyright holders. There are international and European negotiations current in those fields. In the European context, there are proposals for extending certain forms of copyright which, unless they were attached to a fair-use provision, the consumer organisations nationally and at European level by and large oppose. Could Clause 17 be used to bring those into national law? In a more sinister way, there are also discussions on a world-trade basis under the ACTA provisions about changes in copyright protection in the trade context. By definition, those trade negotiations are not transparent or open. We do not know what will come out of them and what might need to be transposed into national law.
	If Clause 17 were used for all sorts of copyright protection in that context, it would undoubtedly be a Henry VIII use of powers. It is not connected to other purposes of this Bill and it would undoubtedly mean that the powers implied in Clause 17 could be used for very wide purposes. I would like the Government to place on the record a denial that Clause 17 could be used for those purposes or for the purposes of extending copyright protection and patent protection more generally. It did not relate to the main purposes of this Bill or the main strategy of Digital Britain. I hope that the fears that are being raised by the wide-ranging nature of Clause 17 could be allayed to some degree. I also agree with the noble Lord, Lord Howard, that, in relation to aspects of Clause 17 and the need to keep up with technology, the Government are justified in having easier and wider-ranging powers but they need to define them significantly more narrowly than is done in Clause 17.
	The view of the Delegated Powers Committee would normally be taken very seriously by the Government. When I was on the Front Bench, every time such a castigation came from the Delegated Powers Committee we automatically rolled over. I hope that the Minister and his colleagues will do the same on this occasion and come up with a more acceptable form of Clause 17.
	I am not clear whether, had the super-affirmative procedure existed in the 1530s, His Late Majesty Henry VIII would have been inhibited by it or indeed whether it would have inhibited his Minister Thomas Cromwell, who more or less occupies the same position as the noble Lord, Lord Mandelson, does at present. In today's age, the provisions in these clauses would be a bit of a break but it would be much better if the clause itself were more narrowly defined in the first place.

Lord Fowler: My Lords, the noble Lord, Lord Puttnam, referred to the report by the Select Committee on Communications, The British Film and Television Industries-Decline or Opportunity?. I say, slightly counter to what the noble Lord has just said, that a great deal of the evidence that came to us from those industries showed their deep concern about what was happening on file sharing. This cannot be cast to one side-it involves not just the film industry but many other areas as well. There is legitimate concern out there. The noble Lord, Lord Puttnam, asked me to state that.
	Our attitude is that, because of that concern, we supported the Government's decision to introduce regulatory measures to combat unlawful peer-to-peer file sharing. We also went on to say-this was raised earlier this afternoon by the noble Lord, Lord Lucas, in one of his many interventions-that we welcomed the decision of some companies in the audio-visual industries to change their business models in order to meet the legitimate demands of their customers while generating returns on their investment in content. Those two things went side by side; I reiterate that today. The music industry, for example, has taken those words to heart.
	This House has to face the fact that threats change and develop and that new threats come along. We cannot simply close our eyes to that and say that there is no way of combating that. The UK music industry supports Clause 17; we cannot ignore that either.
	I heard about the ability we might have to introduce new primary legislation. We need to be careful about that. Camcording crime is a new threat-the threat of illegal camcording. There is no question about the illegality of that. There is no question that people are exercising their freedom in some peculiar way. It is organised crime. People are going into cinemas, making recordings and selling those recordings. They even have tripods and are highly organised. I have not yet, though I undoubtedly will, heard any serious defence in this debate of that practice.
	At the moment, however, the legal position is anything but clear. I asked the Minister what the Government's attitude was. He said they were taking advice but I shall tell him. The Government's attitude is that they are waiting for a test case on the Fraud Act 2006. This questions the argument that new primary legislation can be brought in quickly and be put into effect. Certainly no new primary legislation has been put into effect here. Perhaps the Government do not consider that to be very important, but again I have to say that the film industry regards it as extraordinarily important.
	There is still a lot in the clause to be debated before we get to Report and to serious decisions on it, but we have to face the fact that there is a continuing and changing threat to some of the most important creative industries in this country. We must recognise that because our creative industries are some of the most successful in the world and we want them to develop. That is the whole purpose, surely, of what we are trying to do in this area; we are trying to help those industries. At the moment, the balance in this debate-I have felt this for several days now-is being tipped entirely the other way and we are giving all kinds of succour to those who do illegal things. I hear what people say about that and I respect it, but it would be very unwise of this House to give the message that it condones illegal actions in any way.
	I in no way, shape or form throw to one side the important constitutional arguments of my noble friend on the opposition Front Bench. They are important arguments and we need to consider them very carefully. I rather doubt whether swift new primary legislation at every stage will be the answer, but we must find a sensible practical solution that will satisfy not only the public and public rights but the industries. I say again that the film industry and the music industry-and television, for that matter-are vital for this country, and we should support them. If we find defects in the clause, okay, let us look at them, but we also need to find a solution or we will let those industries down.

Lord Puttnam: I promised the last time I spoke that I would not delay the Committee on this issue, but I want to assure the noble Lord, Lord Howard, that I am not remotely interested in impinging on the dignity of the House or of Parliament or on the processes that we use; I am trying to draw attention to the fact that, in a very fast-moving technological area such as this, there is sadly a discontinuity between the speed of change and the matters that we must address and the processes that we currently utilise in Parliament. I hear what the noble Lord says about pushing through legislation quickly, but in my experience it is very difficult to do.
	I know that the super-affirmative procedure is clumsy-we do not pretend otherwise; it was the only means that we could find to raise the issue-but Parliament has a duty to itself to look at the nature of the threats, the problems, the pace of change, and its own processes, and to try to pull these things together. I think that that is what the noble Lord, Lord Fowler, is referring to. It would be good if the House as a whole could come to that conclusion. We may not be able to crack this problem, but pretending that it will not come back and haunt us time and again is not doing ourselves justice. I hope that those on the Liberal Democrat Front Bench will agree and bend their very fertile minds to possible solutions. The present situation is a mess, and it is foolish to pretend that, somehow or other, primary legislation is the way through. It is not.

Lord Lucas: My Lords, I have a lot of sympathy for what the noble Lord, Lord Puttnam, says. This is an area in which there is an advantage in being able to be flexible and move fast. I like the super-affirmative system; it allows for outside contributions and proper consideration, which we should allow for in our own legislative processes on occasions. The House of Commons took it up recently in Committee on the Education Bill when it took outside evidence as the first part of that process. We are lagging behind on that, and ought to make up the distance.
	My objection is to Clause 17's underlying breadth, which the noble Lord, Lord Whitty, outlined extremely well. Yes, there is a purpose subsection at the beginning, but noble Lords who have read the Evening Standard for the past few days will have discovered that Westminster has decided to extend paid-for parking until midnight from about a month's time to deal with problems that it anticipates during the Olympics-as if people will park in central London to get to the Olympics. Fortunately, we also have the background document, which says that this is actually entirely to do with raising money. None the less, it shows the extent to which a purpose subsection can be used.
	Clause 17 goes to the heart of copyright legislation and exposes the whole of that construct to the affirmative procedure. I would like a clause that was clearer and narrower. We are not totally in the dark; we know what steps people will take if they wish to continue to file-share illegally. They will use cyberlockers, encryption and proxy, and the Government, as my noble friend on the Front Bench has said, have no clue what to do about these things. Nor do I; these are very hard things to deal with. The only clear, technical way of dealing with them is to intrude extremely heavily into what people are doing on the net.
	I am not at all clear that the solution lies in the Copyright, Designs and Patents Act, but I suppose that once the Government have the power to amend an Act they can put anything they want into it to deal with a particular problem. We might find something in there that does not have anything particularly to do with copyright, but the Government have given no illustration of the sorts of things that they need to do to deal with the particular threats that they see coming. If we could focus on that, we might have an idea of how we can make Clause 17 acceptable. I would not be against something along those lines.
	My attention has been drawn to paragraph 136 in my noble friend Lord Fowler's report, which I have been reading with interest, and to the quotation above it from an industry executive on the attitude that he would like his industry to have:
	"You can have whatever you want when you want but it is going to cost you more or less".
	That is the right attitude; we give customers what they want, charge them for it, and get tough if they do not pay. We need that transformation. Given how shaky the Government's ability to deal with piracy is going to be, the industry really ought to be moving to giving customers what they want, how they want it, and when they want it. Then we will reduce this problem substantially. That is the right way in which to protect our copyright. Technology has outflanked us. Speaking as someone who has his own copyright interests, I do not think it defensible to stick with legislation and be tough with customers who misbehave. You give them something extra. You give them incentives to behave properly, and by and large they will.
	I do not mind the amendment at all, but I do not want it on top of Clause 17 as it is at the moment.

The Earl of Erroll: My Lords, I am not quite sure what one should do at the moment, because we seem to have strayed into the Clause 17 stand part debate. Are we going to leap up and speak when we get to that debate, or should we cover it at this point? I would like some direction.

Lord Clement-Jones: If it helps the noble Earl, I intend to make quite a full speech in the clause stand part debate.

The Earl of Erroll: In that case, I will confine most of my remarks for the debate on whether the clause should stand part of the Bill. I do not like the clause at all. If we are to retain it, it must include the super-affirmative provisions and I therefore would vote for that. But at the next stage, I would vote to get rid of the clause altogether. That is my stance. I will explain exactly why I do not think that this clause should stand part when we get to the clause stand part debate. I should like to respond to a couple of remarks made by the noble Lords, Lord Fowler and Lord Puttnam, because I am not against protecting the rights of copyright holders. This is about effectiveness, which is why the other remarks are more apposite.

Lord Faulkner of Worcester: My Lords, it may assist the Committee if I respond to the point made by the noble Earl, Lord Erroll. The rules in the Companion are liberally drawn for Committee stage. If the noble Earl wishes to speak on this amendment and again on whether Clause 17 should stand part, he is at liberty to do so. However, the repetition of an identical speech might try the patience of your Lordships a little.

Baroness Howe of Idlicote: My Lords, I am alarmed by the Government's amendment, which seems rather draconian. I lived through the experience of the passage of the Communications Act 2003 and know very well the importance of getting the right parts of the Bill enacted. Even then, against considerable pressure at times, that Bill was out of date fairly quickly. As to the need to have the power to update quickly, there is an urgency which perhaps we need to address, but which has not been addressed satisfactorily so far.
	I rather agree with the noble Lord, Lord Whitty, who said that, if nothing else could be agreed, the amendment in the name of the noble Lord, Lord Puttnam, should be agreed. Certainly, there should be 90 days, as opposed to 60 days, to gather evidence to refute what was going on. I would again stress that when this Bill is passed, we will need legislation that will be able to react quickly. Like the noble Lord, Lord Fowler, I do not think that primary legislation should be brought in fast. Certainly, after what has happened in the past few years of this Government's reign, there is no way in which primary legislation can be achieved quickly. There is a huge backlog waiting to go through Parliament.
	I have considerable reservations about the government amendment, but I see the need to redraft and to have something. The Government may draw up something which will satisfy us. I certainly hope so.

Lord Howard of Rising: My Lords, the noble Lord, Lord Fowler, talked of new threats and the importance of being in a position to counter such threats, which means that my amendment to Clause 17 is not justified. I hope that he will forgive me for hiding behind the Delegated Powers Committee, which seems to have more authority than me. I very much sympathise with what the noble Lord, Lord Puttnam, and my noble friend Lord Fowler have said. This matter needs to be addressed. The problem nowadays is that the Executive take more and more power away from Parliament, which as a point of principle should be opposed at all times, if it is not a matter of national survival. I realise the importance of our creative industries, which are enormous contributors to the wealth and prosperity of this country and must be looked after. But there is still the idea that the supremacy of Parliament must be maintained.
	As usual, the noble Lord, Lord Whitty, made interesting and pertinent comments. I hope that the Minister will listen to what the noble Lord said when he exhorted him to roll over. The noble Lord and my noble friend Lord Lucas urged Her Majesty's Government to look at the possibility of narrowing Clause 17, which might provide an answer to what everyone wants. I am somewhat disappointed that no one took real note of my comments on the complete ineffectiveness of statutory instruments in terms of controlling government. Eight times since the war in the House of Commons and three times in this House does not seem to be a very effective brake on anyone or anything. But if I was on the other side and wanting to do things, it would be a very effective way of getting absolute power while pretending not to have it.

Noble Lords: Hear, hear.

Lord Young of Norwood Green: My Lords, I congratulate the Committee on this fascinating and wide-ranging debate. Because of the nature of the debate, I apologise for the extent of my reply. I will try to keep it short, but if I do not cover the waterfront, I will not have been a contender-if noble Lords will pardon the pun, which those in the cinematic area will recognise.
	I thank my noble friend Lord Puttnam for his contribution to the debate and for the thought that has clearly gone into the amendment. As noble Lords will see, the proposal under Amendment 212 that the power should be subject to super-affirmative procedure is included in the government amendment laid in the name of my noble friend Lord Mandelson. As such, I hope that this amendment can be withdrawn.
	Amendment 211C also raises an important point that any use of this power should take place only after a full consultation with all those who are likely to be affected. I agree with that sentiment, but the existing wording of the amendment laid in the name of my noble friend Lord Mandelson already specifies that consultation must include the persons who the Secretary of State thinks are likely to be affected, including those who represent such persons. I believe that this wording already includes the bodies which noble Lords wish to be consulted. I therefore suggest that Amendment 211C should be withdrawn.
	Amendments 211D to 211J would change the period specified to be part of the super-affirmative procedure from 60 days to 90 days. As with so many things, a balance has to be struck between the competing needs for careful and measured consideration of any action and the need to be able to act quickly when the occasion demands. I was disappointed that the noble Lord, Lord Howard, felt that the super-affirmative procedure was a form of prestidigitation on the part of the Government-or, if he prefers, a sleight of hand. We see it as a serious protection, which has to go through the hurdle of both Houses. It is true that it has not been successful on many occasions, but that may have been given the considerations that were taking place.
	On our part, there is no attempt to have any contempt for parliamentary procedure. It is a serious amendment. We believe that a balance has to be struck between the competing needs for careful and measured consideration of any action and the need to be able to act quickly when the occasion demands. It is absolutely right that Parliament should have enough time to consider properly any proposed use of this power. The use of a super-affirmative procedure will provide for this.
	I regret to inform my noble friend that we are not convinced about the need to extend the period to 90 days instead of 60 days. We feel that that would tip the balance too far and would prevent us acting in a timely fashion when so required. I thank the noble Lord, Lord Howard, for his reasoning behind not moving Amendment 213, which means that I do not have to respond to it.
	As I have explained, Clause 17 is required to future-proof our legislation and to provide a means for regulation to keep pace with the relentless march of technology. As the noble Lord, Lord Fowler, rightly reminded us, threats change. To limit the power in that way would not allow this aim to be achieved.
	I shall try to address the questions that were raised, provided I do not lose my place. Certainly we would not in any way ignore the comments of the Delegated Powers and Regulatory Reform Committee, but its new report concludes that the amendments are an improvement and it is now for the Committee to decide whether the changes make the clause acceptable. We have moved from being unacceptable to at least an improvement-that is progress. We are not saying that we have reached perfection but at least we have taken away the complete objection by the Delegated Powers Committee and I reassure the Committee that we would not ignore that important body.
	Reference was made to fast-track legislation. The Constitution Committee expressed concern about the breadth of the power in Clause 17 and suggested that it may be better to rely on fast-track legislation instead. We are unconvinced that the fast-track procedure would provide a better alternative to Clause 17. We believe that the requirement under super-affirmative procedure to lay a draft order and explanatory materials in front of Parliament for a minimum of 60 days provides more time for consultation and consideration of proposals.
	My noble friend Lord Whitty asked whether the powers could be used to extend copyright protection. The power cannot alter the definition of copyright protection so in this case we are happy to give the assurance asked for by my noble friend. He also asked why we need Clause 17 if previous clauses cover copyright infringement. Clauses 4 to 16 address online infringement using the tools provided, which are designed to tackle the many-to-many infringement based on detection by copyright holders. We recognise that that does not cover the whole waterfront. Clause 17 will enable us to respond if the case is made where these tools will not help.
	The noble Lord, Lord Fowler, asked whether we need primary legislation to tackle camcording of films in cinemas. After a bit of research and the wondrous powers of the Box to deliver on time-just in time, in this case-I am pleased to tell the Committee that there has been a successful prosecution for this offence under the Fraud Act, showing that existing remedies are effective against this threat. No doubt we can provide more detail for the noble Lord, and I undertake to make it more widely available.
	The noble Lord, Lord Lucas, asked what the power would be used for. The essence of the clause is that it allows us to respond to future threats. By their very nature, such threats cannot be confidently predicted today. We have already said that illegal file-sharing is the biggest problem facing creative industries today, but they may not be the biggest problem tomorrow. We need to be able to respond quickly and flexibly to new methods of infringement. There have been some potential threats, which I identified. We debated previously the question of cyberlockers which again could have a legal as well as an illegal use. The noble Lord said that we do not have a clue how to respond to this. I am not sure that we have not been focusing on it, but he is right to say that that will present another challenge. At this stage, we cannot necessarily concur with him whether the only way of solving it is as he portrayed. There are other threats such as streamed content, which is another problem area.
	I think that I have covered most of the questions raised. A number of comments were made about the need to define the clause more narrowly, and that it is too wide-ranging. I understand and recognise that concern as genuine, and we will reflect on it. Obviously we are looking to find as much of a consensus as we can on the clause. The noble Lord, Lord Howard, was not the only one to raise that. The noble Lord, Lord Lucas, made the same comment. I do not think I need say any more on the super-affirmative procedure. We have tried to build in safeguards. Concern has been expressed that that is not sufficient, especially taking into account the range of the clause. In my assurance to my noble friend Lord Whitty, I made it clear that it is not as wide-ranging as he thought. The noble Baroness, Lady Howe, suggested that it was draconian. I cannot concur with that, although I understand her concern.
	We believe that there is a need to address what the noble Lord, Lord Fowler, expressed best when he talked about the capacity for threats to change over time. That is the purpose of Clause 17 We do not believe that primary legislation, given the time that it takes to introduce, is the way forward. A number of noble Lords share that view. The assurance that I give generally is that we will reflect on the nature of the debate, on the concern expressed about the wide range of Clause 17 as it is currently drafted. We will try to address that.
	I conclude by thanking noble Lords once again for the tenor of the debate and the nature of the contributions, which have been wide-ranging and constructive. I hope that in the light of that explanation, the noble Lord will feel able to withdraw-

Lord Faulkner of Worcester: It is the government amendment which has been moved.

Lord Young of Norwood Green: That is a useful bit of cautionary advice from my fellow Whip. I hope that noble Lords will not move their amendments in the group as we will return to these issues on Report.
	Amendment 211A agreed.

Baroness Harris of Richmond: My Lords, I remind the Committee that if government Amendment 211B is agreed, I cannot call Amendment 212 because of pre-emption.
	Amendment 211B
	 Moved by Lord Young of Norwood Green
	211B: Clause 17, page 18, line 39, leave out from beginning to end of line 5 on page 19 and insert-
	"(9) The Secretary of State may not make an order under this section unless-
	(a) the Secretary of State has consulted the persons the Secretary of State thinks likely to be affected by the order (or persons who represent such persons) and such other persons as the Secretary of State thinks fit;
	(b) following that consultation, the Secretary of State has laid a draft order and explanatory document before Parliament in accordance with section 302B; and
	(c) the order is made in accordance with section 302C.
	302B Draft order and explanatory document laid before Parliament
	(1) If, after the conclusion of the consultation required by section 302A(9), the Secretary of State considers it appropriate to proceed with the making of an order under section 302A, the Secretary of State must lay before Parliament-
	(a) a draft of the order, together with
	(b) an explanatory document.
	(2) The explanatory document must-
	(a) describe the infringement of copyright that the Secretary of State is satisfied is having a serious adverse effect on businesses or consumers;
	(b) describe the effect;
	(c) explain why the Secretary of State is satisfied that making the amendment is a proportionate way to address that effect;
	(d) give details of the consultation undertaken under section 302A(9), any representations received as a result of the consultation, and the changes (if any) made as a result of such representations.
	(3) Where a person making representations in response to consultation under section 302A(9) has requested the Secretary of State not to disclose them, the Secretary of State must not disclose them under subsection (2)(d) if or to the extent that to do so would (disregarding any connection with proceedings in Parliament) constitute a breach of confidence actionable by any person.
	(4) If information in representations made by a person in response to consultation under section 302A(9) relates to another person, the Secretary of State need not disclose the information under subsection (2)(d) if or to the extent that-
	(a) it appears to the Secretary of State that the disclosure of that information could adversely affect the interests of that other person; and
	(b) the Secretary of State has been unable to obtain the consent of that other person to the disclosure.
	(5) Subsections (3) and (4) do not affect any disclosure that is requested by, and made to, a committee of either House of Parliament charged with reporting on the draft order.
	302C Super-affirmative procedure
	(1) The Secretary of State must have regard to-
	(a) any representations,
	(b) any resolutions of either House of Parliament, and
	(c) any recommendations of a committee of either House of Parliament charged with reporting on the draft order,
	made during the 60-day period with regard to the draft order.
	(2) If, after the expiry of the 60-day period, the Secretary of State wishes to make an order in the terms of the draft, the Secretary of State must lay before Parliament a statement-
	(a) stating whether any representations were made under subsection (1)(a); and
	(b) if any representations were so made, giving details of them.
	(3) The Secretary of State may after the laying of such a statement make an order in the terms of the draft if it is approved by a resolution of each House of Parliament.
	(4) However, a committee of either House charged with reporting on the draft order may, at any time after the laying of a statement under subsection (2) and before the draft order is approved by that House under subsection (3), recommend under this subsection that no further proceedings be taken in relation to the draft order.
	(5) Where a recommendation is made by a committee of either House under subsection (4) in relation to a draft order, no proceedings may be taken in relation to the draft order in that House under subsection (3) unless the recommendation is, in the same Session, rejected by resolution of that House.
	(6) If, after the expiry of the 60-day period, the Secretary of State wishes to make an order consisting of a version of the draft order with material changes, the Secretary of State must lay before Parliament-
	(a) a revised draft order; and
	(b) a statement giving details of any representations made under subsection (1)(a) and of the revisions proposed.
	(7) The Secretary of State may after laying a revised draft order and statement under subsection (6) make an order in the terms of the revised draft if it is approved by a resolution of each House of Parliament.
	(8) However, a committee of either House charged with reporting on the revised draft order may, at any time after the revised draft order is laid under subsection (6) and before it is approved by that House under subsection (7), recommend under this subsection that no further proceedings be taken in relation to the revised draft order.
	(9) Where a recommendation is made by a committee of either House under subsection (8) in relation to a revised draft order, no proceedings may be taken in relation to the revised draft order in that House under subsection (7) unless the recommendation is, in the same Session, rejected by resolution of that House.
	(10) Subsections (3) to (5) of section 302B apply in relation to the disclosure of representations under subsections (2)(b) and (6)(b) of this section as they apply in relation to the disclosure of representations under subsection (2)(d) of that section.
	(11) For the purposes of subsections (3) and (7) an order is made in the terms of a draft order if it contains no material changes to the provisions of the draft order.
	(12) In this section the "60-day period" means the period of 60 days beginning with the day on which the draft order was laid before Parliament under section 302B.
	(13) In calculating the 60-day period no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days."
	Amendments 211C to 211J (to Amendment 211B) not moved.
	Amendment 211B agreed.
	Amendments 212 and 213 not moved.
	Debate on whether Clause 17 should stand part of the Bill.

Lord Clement-Jones: My Lords, I hope that the Committee will bear with me as I was very forbearing and did not make a speech in the debate on the last group of amendments. The view on these Benches, and I suspect on several other Benches, is that this clause should not stand part of the Bill. Members on these Benches bow to no one in terms of being keen to see that our creative industries flourish and that their intellectual property rights are properly protected, but we do not believe that this clause should be part of that scheme.
	Let us look at some aspects of Clause 17. We must recognise the anomaly here. Clauses 4 to 16, along with all the amendments proposed to those clauses that we have discussed throughout our consideration of the Bill, have concerned the Communications Act 2003, not the Copyright Act 1988. A moment ago the Minister justified this on the basis that it is all a matter of the tools being available. That is a strange justification and no doubt he will expand on it. The Government also claim that the clause itself has been improved by the amendments that are now to be made to it, but essentially its scope, as opposed to the procedures, remains unchanged. In fact, the Constitution Committee believes that the new amendments now to be incorporated could extend its scope. So these amendments and the Minister's arguments in their favour do not achieve this evening's silk purse award, I am afraid.
	The purpose of Clause 17 is to amend the Copyright Act 1988 for the purpose of preventing or reducing the infringement of copyright by means of the internet. Why is this clause designed to allow changes to be made to the underlying intellectual property rights of creative copyright owners? No other part of the Bill deals with this aspect. Orphan rights are considered later, but Clauses 4 to 16 do not address this issue. Why is this clause not designed to provide more flexibility for the enforcement powers conferred by the Communications Act 2003? That is another conundrum.
	This clause could make major changes to the underlying intellectual property rights available to copyright owners. Certain exemptions such as fair dealing could be deleted in certain circumstances. New rights could be asserted. It could redefine what is meant by and who essentially is infringing a copyright, particularly as regards the duties on ISPs. The Government claimed in their evidence to the Delegated Powers and Regulatory Reform Committee that they need to respond to technological change, and the Minister has today used the term "future-proofing". The industry, on the contrary, talks about particular threats: torrent sites, forums, blogs, streaming sites, aggregators and search engine sites. It also refers to video-to-audio conversion, stream ripping and hybrid sites. Many of these are hosted by cyberlockers, to which the noble Lord, Lord Lucas, referred, which are based outside the UK. I believe that there is also the concept of the newsgroup facilitator which encompasses some of these types of activities. All these are very specific activities, but what further powers to assert copyright under the 1988 Act are needed that are not possible under the provisions of the Communications Act 2003 as it is shortly to be amended?
	The Government point to the defects in new Section 97A of the Broadcasting Act 1990 in tackling non-peer-to-peer infringement. That is all well and good, but where do the new provisions in the Communications Act 2003 actually fall down? Why has no specific clause amending the 1988 Act been suggested? The current threats are well known and the industry has enumerated them in considerable detail, but there is no clear evidence that underlying intellectual property rights are under threat and need to be changed.
	Clause 17 explicitly does not create new criminal offences, but some would say that the gaps in the criminal law are far greater than those in the civil law. The noble Lord, Lord Fowler, referred to this earlier; I hope that the Minister has managed to give him some reassurance that the Fraud Act will cover camcorder use in cinemas, but there are other areas, and certainly some of the issues raised by the recent failed prosecution in the OiNK case beg questions about the criminal law. However, they will not be covered by Clause 17. Again, many would say that dealing with some of the criminal law aspects is a great deal more urgent than trying to deal with some speculative aspect of the civil law. The Government need to explain in what way Clauses 4 to 16 will be ineffective outside peer-to-peer infringement and they need to suggest a different process, probably as a way of amending the 2003 Act.
	Over the years, copyright law has been shown to be reasonably flexible and adaptable. In our view it is the Government, despite reports such as the Gowers Review of Intellectual Property, which was excellent in many ways, who have failed to bring forward legislation to make the reforms that have been suggested-and after several years of labour into reviews such as Gowers. An example of this is that I believe the noble Lord, Lord Lucas, has tabled an amendment later in the Bill to reflect one of the key recommendations made by Gowers, which is that consumers should be allowed to shift formats. That is not included in this Bill. Why is that issue regarded as a second order reform when it concerns consumers so closely? Yet we get a sledgehammer of a provision in the form of Clause 17.
	The sub-committee of the Delegated Powers and Regulatory Reform Committee recognises the changes, as the Minister made clear, but goes on to make the point that primary legislation is more suitable for these kinds of changes. The super-affirmative procedure is not an adequate substitute for Parliament's established way of dealing with matters of complexity and importance-through primary legislation. With Clause 17 we could be placing draconian new duties on ISPs and preventing access to certain websites. "Tackling online infringement", to use the wording of the clause, is not a narrow purpose when in the future probably most of us will derive our entertainment over the internet.
	We must agree with the words of the Constitution Committee in the final paragraph of its report,
	"that Clause 17 is constitutionally inappropriate and should be omitted".

Lord Triesman: My Lords, I am among those in the Committee who did not know whether they should have spoken on the last group or on this group, but this is probably as good a time as any, because I hope to argue that the noble Lord, Lord Clement-Jones, is fundamentally wrong-he put the issue in the starkest terms-about whether this clause, or something very like it after the Minister and his team have given it further thought, which they have committed themselves to do, is needed.
	I sense that there is a good deal of agreement, perhaps consensus, that if something is written that is effective in ensuring that what happens in the future can be safeguarded, there will be a great deal of support for it. It is very important that that should be said, because we are talking about a sector that is approximately 8 per cent of our economy. It is quite hard to measure; I know that some research teams in universities have been trying to measure it, but it is hard to know exactly how to define it. However, the figure is certainly of that order or greater. This is also the sector which is growing fastest, which shows the greatest capabilities in innovation and invention and which will be very important to us in the future. It is also a sector in which many new small firms, which are probably our economic future, will emerge.
	I do not think that it would be wrong or-I say this with respect to the noble Lord, Lord Howard-contemptuous were Parliament to think hard about what it might do to protect those interests in the long run, since they are so fundamental to us, if we can get the right formula for doing it. I think, though, that the noble Lord, Lord Clement-Jones, wants to have his cake and eat it. He says that he is in complete sympathy with everybody in the Committee who has argued that these are very important parts of the economy, that we want to protect these properties and that we want to protect copyright, yet he wants to take a step that would destroy the possibility of doing that in future.
	I take a simple view of this; it is an evidence-based view based on having been the Minister for Intellectual Property and having heard the arguments over quite a long period. It is not simply a matter of theory, although there are, of course, important issues, which I greatly respect, about the powers of Parliament and Parliament's scrutiny of legislation-one could not other than agree about that-but the evidence is pretty significant. I shall give two examples of why I so profoundly, but respectfully, disagree.
	The first comes from a firm that is very large and has significant UK interests-BT. I have no interest in BT other than to use it as an example. In deciding how to allocate its research funds-which sorts of research might be beneficial in the future-and because its research funds were very large in an industry that was moving rapidly, it had what was, in effect, a research council inside the company. It looked at all the competing demands for research, both internally and in some cases externally, it evaluated them and it tried to work out what it had best do in the future.
	What interested me a great deal was that, in doing that, BT tried to identify, over a period of a decade in advance each time it did it, what was likely to happen, not just in its industry, but in a number of industries where there might arguably be some sort of link between what it did and what others were doing. This was because the commercial interests and the capacity of that firm were dependent on having some sort of sense of the future. Occasionally, it identified things that would happen; occasionally, it identified them at the wrong time. However, it will come as no surprise to your Lordships that, broadly speaking, it missed a high proportion of the things that were going to happen, because these are very hard to predict.
	I suggest to the Committee-before I come to my second example, which I hope your Lordships will feel is significant evidence-that the reason for that is straightforward. The reason why it is difficult is that, although it may not be easy to predict a major development when a paradigm has shifted, usually many of the things that have led to it in science and technology and engineering have been reasonably visible to a significant part of the research world as it was happening. However, once one of those events has happened, innovation within that paradigm happens incredibly fast and incredibly unpredictably. Anybody who tells me that they know that it is going to happen or can chart its characteristics-in the way that the noble Lord, Lord Clement-Jones, believes that, in listing the things that we know currently, we might be able to say what will happen in the future-misconceives that kind of development and how it happens.
	That is why I want to illustrate the point with a second example-the example of Shawn Fanning, who will be known to at least some in the Committee by history. He was a freshman student at Northeastern University in Boston who was looking for a simple way to share the music that he liked, at the ripe old age of 18, with his friends. He was an affable sort of bloke and he liked to share the things that he liked. He decided, soon before he turned 19-he did it when he was 19-that staying at university was not the best way of spending your time and he set off, with the help of a friend and his uncle, to find a way of turning MP3 format, a really innovative code and innovative way of compression, into a means of sharing the music that he liked. In that way, Napster was born.
	I know that Napster finally fell foul of the law and was suppressed and many other variants then came about, but the reason I mention the example is that the period from the first moment when he seemed to be thinking about this and nobody else knew to the moment at which he almost undermined the music industry in a fundamental way was nearly 18 months. In fact, the period from the time when anybody might have observed it happening to its happening was rather more than five months, but only just.
	I make the proposition to the Committee that our method of legislating, of which we are rightly proud-it requires a great deal of detailed interrogation of information in order to ensure that we do it in the right way-is not really in a race with events of that kind. It truly is not. We are a bullock cart going against a jet aeroplane, when you think of the speed and ability of that kind of innovation.
	That is where I come to the point that I find so hard to understand about the argument that has just been put as to why this clause should be struck out. It is not hard to list all the things that have happened and say, "Have we covered them in legislation?". However, when you look at Napster, or at the efforts that were made by BT, which I have tried to illustrate at least briefly and I hope with enough detail for your Lordships to recognise the process, what you cannot do is say, "By the way, these are the next things that are going to happen and this is the speed at which they are going to happen and we have got a grip of all of them and will be able, by primary legislation, to deal with them". We will not be able to do that. That is a straightforward fact-we will not do it by primary legislation. If it is insisted on, then we have decided not to do it.
	I am fully receptive to the powerful argument that there may be alternative economic models-we would want to see those-but the argument that we will do this through primary legislation is simply not credible in these circumstances. Therefore, we will have to have a clause of this kind and it will have to have the effect of this kind of clause. I do not personally have huge difficulties with the clause as it is.
	Just in case anybody wishes to say to me, "You would say that", because, like the noble Lord, Lord Lucas, I have intellectual property rights, which are sold in the football industry-I declared that interest earlier in Committee-let me say that I know perfectly well that what we know about streaming now will be superseded. I do not know when or how fast it will happen, but I know that it will most certainly happen, just like every other innovation has happened. It will catch us by surprise and affect a number of the things that are fundamental. The way in which we fund grass-roots football is potentially eliminated in significant part. That will be true in other parts of the sports world as well, including the Premier League and a number of other sports.
	I hope that the Committee will forgive me for the length of the intervention, but I ask noble Lords to ensure, if we are serious about these industries and their value to our economy, that either we have the current Clause 17 or something very like it or we stop pretending that we intend to protect these industries.

The Earl of Erroll: My Lords, what I have said throughout the Bill has not been about trying to hit rights holders. I think that that has been misunderstood by several people who are very concerned about the economics of this-particularly, and I fully agree, the economics of producing things that require a lot of capital input, such as films, sports, games and music, which are expensive to put together and put on. I am not challenging the idea of trying to protect copyright. My challenge comes when someone says, "We've got to do something". The law is not here for PR purposes. It is not about sending a message. Laws have to be effective or they are pointless. Sending messages that do not work merely debases the law in the public's eyes, because then they just ignore it.
	It has always been realised that copyright is much weaker than other rights. Patents get only 30 years to recover because they are better protected and easier to enforce; the whole law is orientated that way. Copyright is a harder right to enforce, particularly because you can get copyright both in the original work and in derivative works. It is a much more complicated situation. That is why copyright now gets lifetime plus, I think, 70 years, which is probably excessive-a very long period in which to recover your initial investment. I worry, like the noble Lord, Lord Lucas, about effectiveness. Will this work or not?
	Unfortunately the noble Lord, Lord Fowler, is not here to hear my next point: camcorders are covered perfectly well. It is unlawful, it is a breach of copyright, to take a camcorder into a cinema and make a copy of a film. This Bill does not cover that at all; it is about communicating and distributing over the internet. If you put that camcorder copy out over the internet for free on whatever network, the Bill will cover it. If you sell that copy, it becomes a criminal offence and comes under the Fraud Act. The law is there already to deal with camcorders and I am delighted to hear that people who do these things have been prosecuted under it, as they should have been. The existing law is adequate.
	I agree entirely with the noble Lord, Lord Puttnam, that the situation is a mess. That is our problem. I have said for a long time that we need to rewrite the Copyright, Designs and Patents Act 1988, which is not right for the digital age. It will be a complicated process; any new Act will have to balance a lot of rights and look at the international aspects, such as how other countries do it and what is effective, so that we are not just doing our own thing. That needs to be done at a parliamentary level, not just by a Minister in consultation with people whom he thinks should be consulted.
	I come on to the wise words of the noble Lord, Lord Clement-Jones. What exactly is modifying that Act going to do? It is not going to cure technical points, because I do not think that the Act deals with such points-unless we want to put a whole technical section into it, which would be a very strange thing to do. The Act could in fact be used to loosen copyright, which might be a good idea, so that mashups, for instance, were no longer a grey area. I could take a short clip from one of the films of the noble Lord, Lord Puttnam, overlay it with a bit of music by one of the noble Lords here, put my own content underneath it and put it on YouTube, at which point I would have breached maybe three copyrights. This is going on the whole time. Because it is so general, at the moment the question is, "Where's the copyright?". Maybe the Minister has secret ambitions to do that behind the scenes; I do not know.
	I cannot understand why the Act is modified in the Bill. The noble Lord, Lord Triesman, talked about Napster, but Napster was always unlawful; it was always covered by the law. Trying to change the copyright Act would have made no difference to Napster at all. The 1988 Act predated Napster, so it was covered. We did not have to change any part of the law. If we had had to change it, Napster would be operating in Britain right now quite legally, because we have not changed the law to cover it. It has always been unlawful to download stuff in that way. That is exactly what we are dealing with now.
	The Copyright, Designs and Patents Act 1988 is adequate for dealing with these things. The challenge arises because rights holders could not keep up with the variety of material that was being transmitted over the internet. That is what the Bill is for: to try to introduce some measures whereby it is easier to offload some of the problems of trying to catch up with the people responsible on to those who can track them-that is, the ISPs-and then use some legal process in order to crack down on them, doing in a different way some of the things that are normally done through the civil courts as a breach of copyright. The Government have started to interfere in civil law by producing measures where they are going to mandate a crackdown. That is an interesting precedent because it can be used elsewhere for other things that the Government do not like, which is why I do not like the provisions between Clauses 4 and 16. Clause 17 is even more dangerous.
	The noble Lord, Lord Puttnam, has talked about Britain almost as if it were a sea of piracy in an otherwise law-abiding world: if we do not pass a law that lets us crack down on this, Britain will be isolated, all the creative people will abandon it and so on. But America is just as bad, as is the rest of the world. The French have failed to get a similar measure through. They still hope to, but it got knocked out by the French Parliament-Sarkozy did not get his way. I may have the right players in there, I may not, but it does not matter; I do not think that the French got the "three strikes and you're out" clause through, although they are hoping to bring it back and get it through. Sweden does not have such measures-it did not dare go that far. It sent some letters and there has been a bit of a crackdown, but levels are back up where they were. We are not an isolated case.
	It will make zero difference where anyone locates themselves. Our creative people will still face the challenges that they do now: to get the right contract from day one with the people who will sponsor them or, if they do not get a nice contract or do not get someone to sponsor them, how to get out there into the wider world, get their stuff on to the internet and find other methods of distribution.
	Now I come on to Clause 17. I wanted to put in context why the clause is totally unnecessary and may have all sorts of unintended consequences that will be very dangerous. Even the super-affirmative method of bringing statutory instruments is dangerous. Look at the Government's general dismissive attitude to 90 per cent of our suggested amendments. Will that be any different just because there is a super-affirmative statutory instrument? No, it will not, because they do not have to amend anything. We cannot force any amendments through; at the end of the day, we have to accept it.
	The previous time when I ran into this business of trying to block statutory instruments, which was over the Regulation of Investigatory Powers Act when we forced through an amendment that meant that the Government would have to come back within a year with a better statutory instrument, there were mutterings off that this was a constitutional crisis, this was not the way that things should be done, it was going against the whole way that Parliament worked and so on. We were threatened behind the scenes and told that we should not be doing it; it would bring the place down. The Minister was so frightened that he spent 25 minutes trying to introduce a minor statutory instrument.
	Anyway, these powers are far too wide, they are quite unnecessary and I cannot see any purpose to them-except possibly to start putting mandatory charges on people because it allows us to impose charges, fees and so on, but that is not the sort of thing that the Act should be for. If we are worried about amending things, I note that we manage to have a criminal justice Bill every year to amend huge tranches of legislation and we seem to have an education Bill about every two years. Maybe the Home Office could give up some of its Bills and we could just sort out copyright.

Lord Howard of Rising: My Lords, there is an underlying problem here. The powers that the Secretary of State is claiming are necessary to deal with the problems connected with our creative industries are incompatible-or sit uncomfortably, whichever way you want to look at it-with a parliamentary democracy.
	I am sure that he did not mean to do it, but to my mind the noble Lord, Lord Triesman, argued strongly in favour of the amendment of the noble Lord, Lord Clement-Jones, because if things move so quickly, the 90-day window asked for by the noble Lord, Lord Puttnam, will be meaningless. It will all have happened. If it is all going to happen anyway, why are we giving these extraordinary powers to the Secretary of State and not retaining Parliament as the ultimate arbiter of what happens?
	We have had a lot of comment today on how the creative industries are being wrecked. The games industry grosses more than the cinema industry now. I said to the managing director of Nintendo, which after all is one of the biggest games things in the world, "What are your views on illegal activities?" I was privileged-I got number one interpreter, I could have had number one, two, three or five but I got number one for this important question. He said, "Could you do something about Spain and China?" I did not like to tell him that my influence in the United Kingdom is pretty abysmal, but when you get to China it is absolutely sub-zero. However, they said that because it is illegal in these countries and we are putting in provisions like these, they sell enough to make the whole thing work. Therefore, from his point of view-I am not saying whether he was right or wrong-he was not worried.
	As my noble friend Lord Lucas said, ultimately the only thing that will stop all this is the right goods being supplied at the right price, so that there is no incentive to get hold of illegal copies and illegal things. I am told that it will not stop those who try to get the new movie out, because for them the game is to get it first. It is not commercial: the fun is to get it first. I am told that if you go to screenings-the noble Lord, Lord Puttnam, will know this much better than I do-for previews of films for BAFTA or something like that, there are people standing in the room with infrared detectors to see whether anybody is filming and to try and stop this game from happening.
	It may be that we are seeing an evolution. Far be it from me to say, but apparently young people now go and visit the same film four or five times. It is an outing, and that is what gives this impetus to films such as "Avatar" which are getting these huge grosses: people go and it is their form of fun.

Lord Lucas: My Lords, I should be very grateful if the noble Lord could enlarge on why he thinks the solutions to this problem lie in the Copyright, Designs and Patents Act. It seems that copyright is quite clear on this: somebody is either making copyright material available for purchase without payment or permission of the copyright owner, or they are acquiring material knowing that the copyright owner is not to be paid. Dealing with that effectively is all about the sort of mechanisms we are putting into the Communications Act, which seems a sensible place to have a power to vary what we can do by way of enforcement under the Act. Why are we meddling with copyright? What changes to copyright can be imagined that help the sort of things that might happen?
	As the noble Lord, Lord Triesman, said, Napster came up and was a surprise to us all, but the principle was the same. We would not have needed to change copyright to deal with Napster or anything like it. We do not need to go at copyright in a big way, nor have we been, to deal with peer-to-peer. The fundamental human actions are the same. All we need to do is make them clearly illegal and find ways of preventing them in the world outside. The copyright remains the same.

Lord Triesman: My Lords, I appreciate the noble Lord giving way just before sitting down. I think the point I have tried to make has been misconstrued. It is not that you cannot capture some of these activities using current copyright law; it is that the rate of technical advance produces circumstances which may make that very cloudy and difficult to enforce. They are also difficult to project.

Lord Whitty: My Lords, I promise not to repeat what I said in the previous debate. There are two issues here.
	First, if Clause 17 stays as it is, it is a matter of great controversy in this House. Whether the noble Lord, Lord Clement-Jones, moves his amendment tonight or a debate is staged I would have to support it if the Bill stays the same. However, I was comforted by what the Minister said in response to the previous group of amendments. He said that he would look at the point again. I would suggest that he looks at it again in two forms and promises to do that at the end of this debate.
	The first aspect is that the way in which Clause 17 is drafted in relation to the Copyright, Designs and Patents Act is very wide. Part 1 of the Act itself is very wide and subsection (4) of this clause makes it even wider by referring to other enactments "whenever made". That needs to be narrowed down very significantly. Even if we accept that to some extent we have to future technology-proof the provisions we have here, the provision could be narrowed significantly and it would then be more acceptable to the House, particularly with a super-affirmative resolution.
	The other aspect is the fundamental approach. I say to my noble friend Lord Triesman and to the noble Lord, Lord Fowler, who is no longer in his place, that the long-term health of the creative industries depends on us moving to a legal form of access to the copyright which they control. Clampdowns, crackdowns and prosecution through the civil courts or through the new system will not return a penny to the copyright holders.
	The whole purpose of any change ought to be to move to legal systems and new, legal business models. If we could change the copyright law or any other law to enable that system to be slotted in more easily, perhaps we could use something like Clause 17 to do so. However, if Clause 17 is concerned only with extending crackdown provisions on unlawful file-sharing arrangements to other prospective and actual technologies, I still will not be able to support it. If it was more positive and narrower, then when the Minister comes back with a revised clause he might meet with less hostility. For the moment, I would have to support opposition to the clause were it pursued and the Minister did not give me the comfort I seek.

Lord Razzall: My Lords, I rise briefly in support of what was said by my noble friend Lord Clement-Jones.
	I have listened with great interest to this debate on what we ought to do. I was waiting to hear from the experts we have in this Chamber exactly what perils they think could be dealt with by the technological developments that are going to be covered by the operation of Clause 17, if it is implemented. I was very interested that the noble Earl, Lord Erroll, and the noble Lord, Lord Lucas, both of whom are experts in this debate, came down on the side of my noble friend Lord Clement-Jones and do not think that this is necessary. If there were perils that we ought to look forward to in the future, I am sure that, having listened to the noble Earl and the noble Lord, Lord Lucas, over the past three, four or five days of a lifetime, they would have brought them up, but they have not done so. They feel that such perils cannot be forecast.
	I hesitate to go against-I almost said my noble friend Lord Triesman, having just placed money on England winning the World Cup. I hesitate to go against him, because if he was wrong about Napster-as of course he was, as the noble Earl demonstrated-perhaps he is wrong about England winning the World Cup. He was certainly wrong about Napster, because as everybody has indicated, Napster, as an example of such a peril, would have been caught by the existing law.
	I want to make a very straightforward point. I do not have to declare an interest, but over the years I have been involved in advising media companies. For years those companies have wanted legislation to be passed to deal with the perils with which this Bill deals. What has happened? The Tory Government did nothing; the Labour Government did nothing. Now, right at the end and shortly before the election, the Government come up with a Bill to deal with a problem that has been there for years and years. Suddenly, surprise, surprise, they want to put a clause in that says, "By the way, if we have got it wrong, we want to be able to make a statutory instrument to amend it in the future". This is not a new problem. All these perils around technological developments and breaches of copyright have been going on for years. No Government have done anything about them, but suddenly the Government say, "We are going to do something about it now, but we want also to take the power to change it".
	I tell the Committee something else. The Constitutional Reform and Governance Bill has been going on for years and years. Why do the Government not put a clause in the Bill that says, "Oh, by the way, we are going to amend the constitution, but we might get it wrong so let us put in the power to amend it again by the affirmative resolution process?". Why do the Government not do that? That is the point of this Bill and that is why we oppose Clause 17.

Lord Young of Norwood Green: My Lords, we have had another interesting debate. Given the time, I will do my best to address the points that were made without going on for too long. I shall try not to repeat much of what we have covered on a previous occasion, but some repetition will be inevitable.
	The noble Lord, Lord Clement-Jones, suggested that the amendments we are proposing will not help at all and that the Constitution Committee's report said that the government amendments would widen the scope of Clause 17. We do not agree with that assertion. Clause 17 enables the Secretary of State to make provision to amend Part 1 of the 1988 Act,
	"for the purpose of preventing or reducing the infringement of copyright by means of the internet ... having regard to technological developments that have occurred or are likely to occur".
	Government Amendment 211A provides that the Secretary of State can act only if he is satisfied that the infringement in question is having a serious adverse effect and that making the amendment is a proportionate response. There would, of course, have to be evidence to validate and support that. It was further suggested that Clause 17 would allow the definition of "copyright" to be amended. I make it clear that this is not a power to make sweeping changes to the nature of copyright or to what constitutes copyright infringement. The limitation not to amend any criminal offence means that no change can be made to what constitutes infringement, but the measure could be used to help us to protect creators of all types from having their work unfairly exploited without their permission. This power will be used only where new technologies or new services are being used in such a way as to cause serious adverse effects to the rights of others which cannot be tackled under the existing legislation or by the mechanisms in Clauses 4 to 16. The power cannot be used to change what is and is not considered an infringement under copyright law. Therefore, consumers need not worry; behaviour which is considered reasonable and lawful now will not be restricted in the future.
	Recently, I read a biography of Samuel Johnson which contained a gem of information; namely, that the first copyright Act occurred in 1709, so just over 300 years have passed since then. Further, the journal of his Journey to the Western Isles was very popular and five editions were produced fairly quickly. However, noble Lords will be pleased to hear that it was pirated almost immediately in Ireland, so plus ça change in this matter.
	The noble Earl, Lord Erroll, took chunks out of the wonderful work of the noble Lord, Lord Puttnam. "Chariots of Erroll" is a frightening concept. My noble friend Lord Triesman gave some good examples. Noble Lords may not have liked the example that was given of the Napster case. However, it demonstrated that the passage from concept to mass usage-and mass usage on a global scale-was exceedingly fast. That is the point there. The noble Lord, Lord Razzall, said that this measure was not necessary because we cannot forecast what will happen. However, a number of potential threats have been forecast in this debate; for example, from cyberlockers, streaming or torrents. We know that such phenomena are developed very quickly.
	My noble friend Lord Whitty asked me to consider the issue of narrowing. I have already given a commitment to look at that concern. Can we narrow this down significantly? Can we change the system to enable new legal business models to develop? Of course, we want to encourage that. However, I am not sure whether we can incorporate it in legislation. The noble Earl, Lord Erroll, said that we cannot use legislation to send messages. However, we do intend to send messages. I thought we were agreed on that. We said that we were trying to change behaviour and that we agreed on a graduated response. That graduated response means that, in the first instance, we will be sending messages and trying to change behaviour. If people do not respond to that, we shall move to the deterrent element. However, we do not want hundreds of thousands of people to go to the courts and become involved in an expensive and unnecessary procedure. Therefore, I am puzzled by the notion that we cannot send a message.
	As I said, I am conscious of the time. I do not want to try to cover everything that we covered last time. However, the noble Lord, Lord Clement-Jones, once again referred to draconian measures for internet service providers. The Secretary of State cannot just dream this up. First, we shall look to Ofcom to provide a report. We will look for a basis of evidence. Whether or not we think that the super-affirmative procedure is exactly right, if the Secretary of State wants that to go through both Houses, there will have to be evidence to sustain that.
	I reiterate the assurance that we will see what we can do with regard to Clause 17 because if it is to be successful we will have to address some of these underlying concerns about what is seen as its breadth and the ability to ensure that there is effective parliamentary control. I thank noble Lords once again for contributing to this debate. I trust that they will support the clause.

Lord Clement-Jones: I thank the Minister for his response and all those who have expressed opposition to the clause. We may need to have further debates on this clause at the Report stage, depending on the Government's approach. I appreciated the Minister's reference to Samuel Johnson. When a man is tired of the Digital Economy Bill he is tired of life. I am sure that this show will run and run.
	When I heard the comments of the noble Lords, Lord Puttnam and Lord Triesman, both of whom I respect enormously and both of whom have great experience, I was reminded of the phrase that Harold Wilson used to use, the white heat of the technological revolution. He used that phrase to inspire us all in thinking that this was the future, that things were changing at an incredible pace, that we could not keep up and that we needed firm guidance from No 10, DCMS, DBIS, or whatever government department was involved. We were given the impression that we were powerless in the face of this changing technology. The fact is that we have seen enormous changes in technology over the past 10 to 20 years. How much has copyright law changed in that period? The principles of copyright law are as applicable now as they were then. Frankly, this is an attempt to corral us into a constitutionally inappropriate way of changing the law. We have the fast track, which has now been validated by the Video Recordings Bill, and was referred to by the Constitution Committee. Why can we not use that? I did not feel that the Minister answered that properly.
	Throughout our discussions on the Bill, I have heard very clearly what the noble Lords, Lord Triesman and Lord Puttnam, had to say. Of course, we cannot tell what the future will hold in terms of technological changes. The point is that it is much more about enforcement than it is about actual infringement and underlying copyright. We may have talked at length about the precise form of Clauses 4 to 16 but they will give copyright owners and creative industries far more leverage over internet infringement than they have ever had before. Changing copyright is not necessary. Until the Minister can demonstrate why cyberlockers are not covered, why all the other technological changes and ways of delivering and infringing are not covered by current copyright, I do not think that he has made the case.
	I thought that what the noble Earl, Lord Erroll, said about Clauses 4 to 16 effectively being a new substitute for the civil courts was entirely right. It is pioneering stuff and that is why we have spent so long over it. That is the essence of this Bill. Clause 17 is quite irrelevant to all that. The point was made that we can argue about orders; we can have debates about them; we can have the super-affirmative; we can have 60 days consultation or 90 days consultation. When I tabled my Motion of Regret, which made sure that the casino in east Manchester was not built, the Conservative Front Bench-I give credit to the Conservative Back Benches-was advised that it was constitutionally inappropriate for it to support my Motion. I understood that and I luckily was able-with the aid of the most reverend Primate the Archbishop of Canterbury whose assistance does not come very often, at least not to me-to persuade a large number of Back Benchers in the cause. That was highly unusual. I do not believe that the position would change in the future. It is one of those things. The Front Benches are very reluctant to put their weight against a properly consulted over order. They cannot amend it, but nevertheless those are the constitutional proprieties. I am afraid that this nowhere matches primary legislation.
	I will not go on any further. I am sure everybody needs their dinner hour. I do not believe that the case has been made. If this clause is designed to send a message, I think the Post Office is a much better way of doing it.
	Clause 17 agreed.
	House resumed. Committee to begin again not before 8.53 pm.

Financial Services Bill
	 — 
	First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Charities Act 2006 (Changes in Exempt Charities) Order 2010
	 — 
	Motion to Approve

Moved By Baroness Crawley
	To move that the draft order laid before the House on 18 November 2009 be approved.
	Relevant Document: First Report from the Joint Committee on Statutory Instruments.

Baroness Crawley: My Lords, the two statutory instruments before us today form part of a package of changes to the regulation of exempt charities, following on from the Charities Act 2006. While the general law of charity applies to exempt charities, they, unlike other charities, are exempt from many provisions of the Charities Act 1993. Notably, they cannot register with the Charity Commission and are outside the scope of its supervisory powers. There is currently no specific regulatory mechanism in force to promote or ensure their compliance with charity law.
	The 2002 Strategy Unit Review on charities and not-for-profits found that the position of exempt charities was anomalous, confusing for the public and a threat to the integrity of charitable status. It made recommendations for improving the regulation of exempt charities as charities-including the proposal that existing "main regulators" should be sought where possible to take on a charity oversight role in addition to their existing regulatory role.
	On public consultation, the majority of respondents agreed with the principle that exempt charities should be regulated as charities. The Government considered it appropriate that in return for the significant benefits of charitable status all charities should be regulated as charities. The key issue was how to achieve this while recognising that many exempt charities were already sufficiently regulated in one way or another-albeit not as charities.
	In accepting the Strategy Unit's recommendation, the Government set out their aim of establishing arrangements that would impose the minimum of extra bureaucracy, but at the same time secure greater accountability of, and charity law compliance by, exempt charities. We sought, in line with the Strategy Unit's recommendation, to do this by identifying for each group of exempt charities an existing main regulator that could become principal regulator. The principal regulator would be under a new duty to promote charity law compliance by those charities.
	Some have questioned the principal regulator approach, suggesting instead that all exempt charities should lose exempt status and come directly under the Charity Commission's regulation. However, we need to balance this view against the additional regulatory burden that would result-many consultation responses were from exempt charities which were concerned about being over-burdened by regulation, or answering to multiple regulators. Most of the concerns raised during debate on the exempt charities provisions of the Charities Bill were seeking to minimise the burden of regulation of exempt charities. The principal regulator approach was well supported as a means of doing this. That is why we have pursued the principal regulator approach.
	Where a suitable principal regulator could not be identified, exempt status would be removed from the relevant charities. These charities would be required to register with the commission if their gross annual income exceeded a specified financial threshold-currently £100,000. Parliament agreed to the making of these changes by passing the Charities Act 2006.
	In the 2006 Act, Parliament also agreed to increase the Charity Commission's powers in respect of exempt charities. Importantly, the Charity Commission must consult the relevant principal regulator before exercising any regulatory powers in relation to an exempt charity.
	These provisions of the 2006 Act will be implemented and changes made under them in several tranches. The two SIs being debated tonight form part of the first of those tranches. The provisions are being implemented in tranches to recognise the readiness of different groups of exempt charities and principal regulators, and to help the Charity Commission manage the registration of charities ceasing to be exempt.
	The draft Charities Act 2006 (Changes in Exempt Charities) Order will remove exempt status from certain groups of exempt charity. The groups affected are: the colleges and halls in the Universities of Cambridge and Durham; the colleges in the University of Oxford; higher education institutions in Wales which are currently exempt charities; charitable institutions connected with the institutions that I have just mentioned which are currently exempt charities; and the Board of Governors of the Museum of London. These changes are made because a suitable principal regulator could not been identified. The changes do not affect the charitable status of these institutions. Separate regulations will be made to ensure that, subject to the £100,000 threshold, they are exempted from the requirement to register with the Charity Commission.
	The order will also confer exempt status on certain charities connected with the British Library Board. This change is considered desirable to ensure that they are appropriately regulated for charity law compliance. It will mean that their charity law compliance will be promoted by the same person who promotes it for the British Library Board; namely, the Secretary of State for Culture, Media and Sport.
	I hope that we have already been able to provide the noble Viscount, Lord Eccles, with some reassurances about the impact of these instruments on the Eccles Centre for American Studies in the British Library. In 2003, at the request of several charities closely associated with the British Library, the Charity Commission made a uniting direction to help simplify their administration and regulation. The result of this direction is that they are treated as part of the British Library Board and thus within the scope of its exempt status. The charities are, as a result, currently out of scope of the Charity Commission's regulation. As far as the charities covered by the uniting direction are concerned, we would expect some or all of them to become exempt charities in their own right as a result of the amendment to paragraph (za) of Schedule 2 to the 1993 Act proposed in Article 2(7) of the draft order. We do not expect this change to have any significant practical effect for the charities concerned.
	We cannot provide such a cast-iron guarantee that other charities apparently connected to the British Library Board will not be affected by this provision. However, the Charity Commission has said that charities governed independently from the British Library Board and able to make their own decisions about what projects or activities they will fund or support will not be considered by it to be exempt and will still be required to register with the commission.
	The draft order also makes a number of minor provisions to ensure a smooth transition from one status to another. They deal for example with the preparation of accounts for the current financial year and ongoing charity proceedings and land transactions.
	The draft Charities Act 2006 (Principal Regulators of Exempt Charities) Regulations prescribe principal regulators for three groups of exempt charities: the Higher Education Funding Council for England for higher education institutions in England and their connected institutions; the Secretary of State for Culture Media and Sport for the boards of trustees of the museums and galleries and their connected institutions; and the Secretary of State for the Environment, Food and Rural Affairs for the board of trustees of the Royal Botanic Gardens, Kew, and its connected institutions.
	The regulations do not give the principal regulators any new powers to intervene in the affairs of the charities for which they are responsible. If charity law problems arise, it will be for the Charity Commission to exercise its regulatory powers at the invitation of the principal regulator. Some have questioned whether proposed principal regulators that are also funders may be too conflicted to take on the principal regulator role. We have considered this carefully with the proposed principal regulators. These bodies have existing oversight roles alongside their funding roles. The fact that these bodies already have this oversight role complements the role of principal regulator. We do not believe there is an inherent conflict between the two roles. However, if a conflict of interest were to arise, it could be effectively identified and managed by the relevant principal regulator, with advice from the Charity Commission.
	The duty of the principal regulators will be forward-looking. They will be required only to promote compliance with the charity trustees' charity law obligations arising on, after, or ongoing at, the commencement date. The Charity Commission will be in a similar position.
	The Office of the Third Sector, the Home Office and the Charity Commission have been closely engaged with stakeholders on these issues since 2003, when discussions began with the various groups of exempt charities and their existing regulators to identify potential principal regulators. This resulted in a list of proposed principal regulators being published alongside the draft Charities Bill in May 2004. Since then, discussions have continued and, for the purposes of this tranche, the Office of the Third Sector and the commission have consulted with the proposed principal regulators and bodies representing the groups of charities that will be affected by the SIs and, in many cases, the individual charities themselves. Early drafts of the SIs were shared with these bodies for comment last year.
	There is expected to be little, if any, noticeable impact on those exempt charities for which a principal regulator is appointed. Their existing regulatory regime will continue, but with their regulator also promoting charity law compliance. For example, they will account and report as now without any duplication of reporting to the Charity Commission. An impact is likely to be felt only if something seriously goes wrong and the principal regulator needs to call on the Charity Commission to intervene. However, charities under the principal regulator regime are likely to benefit from guidance on charity law issues, including guidance tailored for sector-specific issues.
	There will, however, be some costs for charities that cease to be exempt and have to register with the Charity Commission. We and the commission have worked to minimise any additional burden of regulation. The commission does not charge fees for its services and, to make the registration process as straightforward as possible, has already started working with charities that will cease to be exempt. However, we accept that there could be some indirect one-off costs for the charities that have to register.
	There will also be additional one-off costs for all charities that cease to be exempt and own registered land, or for which such land is held on trust. This is because they will need to pay for Land Registry records to be updated to reflect the restrictions on their ability to dispose of that land. These restrictions do not apply to exempt charities. These costs were not anticipated at the time of the original impact assessment and have come to our attention since the SIs were laid in draft. As a result, it is not possible to give an exact costing arising for each charity. I understand, however, that the fees currently payable to update the register are £50 for the first three registered titles affected, and £25 per subsequent title affected. We have discussed with the Land Registry the possibility of these fees being waived or reduced. However, the Land Registry depends upon the fees it charges customers to cover its costs and these applications will be treated in the normal way.
	There will also be some annual costs for charities that cease to be exempt. Registered charities must submit an annual return to the Charity Commission. The cost of preparing this is estimated to be £32 in the first year and up to £23 in subsequent years, or up to £124 for charities with incomes over £1 million which have to provide a more detailed summary information return. These can all be completed online. No extra costs are anticipated in relation to the preparation or scrutiny of accounts, but these will have to be sent to the commission each year-again something which can be done online to simplify the process.
	Charities ceasing to be exempt will, like other non-exempt charities, have to prepare a trustees' annual report. The commission has estimated the annual cost to formerly exempt charities required to register as ranging from £287 to £534, depending on the size of the charity. No other costs are anticipated for charities which cease to be exempt.
	The Charity Commission has developed memoranda of understanding with each of the principal regulators to be appointed in this tranche, and is also establishing a committee of principal regulators which will meet regularly to share best practice and ensure consistency. The commission also publishes guidance on its website about the forthcoming changes in relation to the regulation of the exempt charities, including guidance on registration for those charities that will be required to register.
	The effectiveness of these provisions, and the impact of the changes on exempt charities, will be evaluated as part of the statutory review of the Charities Act, due to begin next year. These SIs will in part bring about changes that were initially approved by Parliament during the passage of the Charities Bill 2006. I believe they will achieve the balance of improving the accountability of, and charity law compliance by, exempt charities while keeping the regulatory burden to a minimum. I expect these measures will increase public confidence in exempt charities, and in the sector as a whole. I therefore strongly commend them to the House. I beg to move.

Viscount Eccles: My Lords, I am very grateful to the Minister for setting out these two instruments. In speaking to these and to my Motion I will concentrate on the major issues. I do not believe the House will be particularly interested, or indeed particularly troubled, by some of the minor issues to which the Minister referred.
	First, I must declare interests. I was at Magdalen College, Oxford, which will willingly give up its exemption under the changes order, and until recently was a trustee of Magdalen's development foundation, which is a registered charity. I was, some years ago, the chairman of the trustees of Kew Gardens and on the board of Kew's foundation and friends. I am a founder friend of Kew. I am a member of the advisory council to the Eccles Centre for American Studies at the British Library, as was mentioned by the Minister, and a member of the British Library's friends. I have no particular problems with the consolidating arrangement that was made by, and with the approval of, the Charity Commission for those charities at the British Library. There are, however, issues which arise out of the friends of the British Library which I think are quite important. All of those charities are affected by one or other or both of these instruments, and I am also a member of the friends of several others of those affected institutions.
	I would say straight away that I fully accept that Parliament passed the 2006 Act and that it enabled Ministers to do the things they are proposing. However, Parliament did not agree to this particular solution. There were options and they remain in the 2006 Act and in my view, and I hope to develop this argument, there was a much more elegant solution or series of solutions. I would also say that although I am no longer a member of the Merits Committee, I was when these instruments were first laid in July. They were then withdrawn and we are now considering their replacements.
	They need to be seen in context. The number of charities affected is quite small even though the Charity Commission is the regulator of 160,000 charities, in fact some estimates are even larger than that. Whatever is done with these instruments, we need to remember that the primary responsibility for the regulation of the sector rests with the Charity Commission. The issues raised by these instruments are complex and significant and it is their importance and complexity which makes me so critical of the decision recorded in the bald statement in paragraphs 8 of each explanatory memorandum. They state that the regulations,
	"have not been the subject of formal public consultation".
	In her summary of the position, the Minister referred to the Strategy Unit and to the discussions and the recommendations that were made in the pre-legislative period up to 2004 and perhaps, in the final analysis, a revision of the documents in 2005. That is a long time ago, and I know of no precedent where the implementation of an Act through statutory instruments is dependent on the pre-legislative scrutiny and the processes that were undertaken at that time. It is this that makes me so critical of the decision not to hold a formal public consultation. At the time, the Cabinet Office had responsibility for the better regulation agenda. It is inexcusable that it broke its own rules. Public consultation was a necessity under those rules. Instead, the explanatory memoranda continue to rely on the work done between 2001 and 2004. This was incomplete, and at the time revealed sharply differing opinions among the 60 respondents, whose responses clearly showed that both exemption and the possibility that sponsoring departments could become charity law regulators were highly contentious issues. There was then, as there is now, a compelling case for further consultation.
	There is also a compelling case for an up-to-the-minute regulatory impact assessment, based on the data accumulated since the passing of the 2006 Act. Of course there are some registration costs that can be calculated; but if we are changing the regulatory responsibilities of significant bodies, it behoves us to have a sensitivity analysis. I doubt whether the Charity Commission has had any experience of dealing with charities such as the Oxford colleges, some of which have been going for rather a long time and have statutes and ways of doing things that are quite particular. I have heard that there are already issues between the Charity Commission and an Oxford college or two.
	The need for a regulatory impact assessment based on the data for the 2006 Act also leads to needing the data on the Companies Act 2006. I will return to this point, because many registered charities-indeed, nearly all the large ones-are also companies limited by guarantee. Therefore, they come under two regimes and must satisfy both. Many institutions affected by these orders have related companies limited by guarantee. Any change in regime is likely to cost money, even if it is only fees for prudent legal and accounting advice. This is another matter that has gone unmentioned in the explanatory memoranda.
	It has been equally clear for the past three years that there were bodies-for example, the NCVO, the Charity Law Association and leading firms of accountants and lawyers-with far greater knowledge of the voluntary and charitable sector than the newly formed Office of the Third Sector. It was forgotten that the issues that arise when changes are made to charity law are always complex. Well presented evidence needs to be explained, most notably evidence from the Charity Commission, which is the most involved and experienced adviser available. We lack that evidence. Instead, we have draft regulations, sketchily explained and unilaterally imposed by the Cabinet Office on behalf of the Office of the Third Sector, without public consultation or regulatory impact assessment.
	It is not too late for the important issues that arise to be properly and publicly discussed, because two further steps are needed before the instruments come into effect. A 2006 commencement order is needed, as is a further set of regulations under Section 3A of the 1993 Act, as set out in paragraph 4.6 of the explanatory memorandum. There is time for further consideration.
	The first important issue to consider is that of regulation itself. The 2006 Act makes it possible to opt for more than one way forward. While it enables the appointment of regulators other than the Charity Commission, it is equally possible to make the commission the sole regulator. The sole regulator option was preferred, for example, by national museums directors-who are pretty directly involved in what is happening with these instruments-by the Museums Association and by the Charity Law Association. One strong argument that they made was that since the public well understood the role of the Charity Commission, it would be confusing, and thus damaging to public confidence, were other regulators to become involved. I agree strongly with the proposition that bringing in Secretaries of State as regulators is not good for public confidence. These witnesses volunteered their views: there has never been public consultation, with targeted questions aimed at discovering the response either to Secretaries of State or to the Higher Education Funding Council for England becoming principal regulators. Nor has there been a formal response to the simplifying suggestion that all charities should be registered with the Charity Commission. The Minister has not given us an answer to that tonight either. It remains unclear why the Government have not followed up that suggestion and I shall return to that later when discussing Kew Gardens. Although I shall now note that simplification and a level playing field are the principle arguments made, and convincingly made, for removing exemption from university colleges and thus bringing them within regulation by the Charity Commission, to argue that something is good here but bad there smacks of cherry picking.
	The second issue is the complex one of friends' organisations. I shall be brief. They are most commonly companies limited by guarantee and registered charities. There is a question mark over their heads when the institution with which they are friends becomes exempt and is regulated by someone other than the Charity Commission. Given the combination of primary charity and company law with the secondary legislation which attaches to both, the question is whether a particular friends' organisation is legally exempt. If it were, it would be required to de-register from the Charity Commission under the terms of the 1993 Act, as amended by the 2006 Act. That loss of its charity number would raise all kinds of questions with the members of the friends. For example, what happens to gift aid? Again, public confidence will be damaged. I was hoping to be able to welcome the Minister's assurance that it is government policy that friends' organisations will, without doubt, remain registered charities. I would welcome a further assurance that if, by some unintended consequence, present legislation, including these orders, determines that a friends' organisation-for example, the Friends of the British Library-had no choice but to become exempt, will the Government agree to take steps to introduce measures which ensure that present policy prevails and registration with the Charity Commission is maintained?
	Thirdly, I shall refer to Kew in more detail. Kew is to be an exempt charity, with Defra as its principal regulator. Defra provides Kew with its annual grant from public funds under Treasury rules. Since way back in 2002-03, objections have been raised to the principal involved in a sponsoring department also being a Charities Act regulator. I really do not think that the Minister gave us an adequate justification for dealing with the argument that there will be a conflict of interest. These representations in any public sense have gone unanswered. Is there a better answer?
	Matters become more complicated if we move on to consider the Foundation and Friends of the Royal Botanic Gardens Kew. As it is a registered charity-No. 803428-the Charity Commission is the regulator and will remain so. The foundation and friends organisation is incredibly important to Kew and I think it transferred £10 million to the Royal Botanic Gardens last year. The commission will also have rights and duties toward Defra, the other regulator, as the Minister mentioned under Schedule 5 to the 2006 Act. Furthermore, the board of Kew, members of which also serve on the foundation board, will be in a triangular relationship: Defra, the Charity Commission and themselves in two guises, which is likely to be a recipe for trouble. Those who favour the commission as the regulator of all charities certainly have a point. There are other institutions on the list in similar situations.
	Consideration of this point leads to a question to Ministers. Under the provisions of Section 11(12) of the 2006 Act, the Minister can only-the "only" is there-make an order if she is satisfied that it is desirable in the interests of ensuring appropriate or effective regulation. No evidence has been included in the explanatory material to show how that test of appropriateness or effectiveness is met. If there were consultation, I guess that there would be a school of thought saying "inappropriate", and surely there is effectiveness already. What is the case for saying that the test is met?
	Finally, I believe that the Office of the Third Sector has shown a fine disregard for Parliament's amendments to the Bill. The office's case for these orders depends on work done when the Home Office was responsible and its reliance on that work ignores Parliament's decision during the passage of the Bill to include Section 6(4) which states:
	"In the exercise of its functions the Commission shall not be subject to the direction or control of any Minister of the Crown or other government department".
	In laying these orders, which alter the Commission's responsibilities without securing the Commission's expressed agreement, the Government must be sailing close to the Section 6(4) wind and thus not meeting Parliament's decision that the Commission should be truly and unusually independent. Will the Minister assure us that due regard will be paid to Section 6(4)?
	However, there may be more to it than this. My impression is that in some version of turf war between the Office of the Third Sector and the Commission, it is no surprise that the Commission is in the middle of 5 per cent cuts in its annual expenditure. Its resources are already slim and it carries a heavy responsibility, and, as Jane Austen knew, it is hard to be independent if you have no money. It may well be convenient for the Office of the Third Sector to forge ahead with its transformation role in support of public services, urged on by the Prime Minister, while sidelining the Commission, despite Parliament. This would go a long way to explaining a preference for other regulators, however inexperienced or inappropriate. It would also explain the absence of a regulatory impact assessment.
	A great deal has changed since the 2001 Strategy Unit started on this story. We have a different Prime Minister, the Home Office has given way to the Office of the Third Sector in the Cabinet Office, the Cabinet Office has lost its regulatory responsibilities to BIS, and the re-established Charity Commission has had three years' experience of the widely welcomed 2006 Act. Everything tells us that it is time for fully open and compliant orders. These two instruments have been withdrawn once. They need to be withdrawn once more.

Baroness Pitkeathley: My Lords, I declare two interests: first, I am chair of the Third Sector Advisory Body, and someone who has spent most of her working life working in or with the charitable sector. Secondly, I am chair of the Council for Healthcare Regulatory Excellence. Wearing both these hats, I support the proposals made by the Government in these instruments. At the Council for Healthcare Regulatory Excellence and with the regulatory bodies which regulate the health professions, we always refer to regulation being done with the "right" touch, not a "light" touch, although the right touch often is a light one.
	Overall we try to apply the following test to regulations. Are they focused on the protection of patients and the public? Are they concerned with their safety? That is the prime reason for their existence. Is regulation fair? It must be seen to be fair or it will be resisted. Is it proportionate? It must not be heavy-handed or overburdensome. Is it transparent? It needs to be open in its operation and structures, and consultation plays a very important role in that. Is it agile and flexible? Can it adapt to changing circumstances? Finally, is it good value? We must be aware of pressures on the public purse, especially at times like these.
	I feel that the proposals before us tonight for regulating the exempt charities meet these criteria. Moreover, the proposals were widely consulted on and approved by most of those affected, although of course, that consultation took place some time ago. I should emphasise that if any discrepancy or bad practice is found, the regulators will have the power to refer to the Charity Commission, as my noble friend has told us, which will take the matter up.
	I remind your Lordships that regulators liaise on matters affecting their client groups. They share best practice to ensure that there is no duplication. Such co-operation does not depend on legislation or on statutory instruments, but on the common-sense approach taken by regulators who know very well that the last thing we need is to have any activity regulated twice over if we are to avoid the bureaucracy which has concerned so many of us. Far from their sidelining the Charity Commission, it seems to me that these are sensible proposals, accepted by the Charity Commission. It is the beneficiaries-the public who use the institutions-whom we should have in mind. In my view, the proposals meet their needs.

Lord Shutt of Greetland: My Lords, I, too, thank the noble Baroness for presenting the orders, and the noble Viscount, Lord Eccles, for his contribution, which I have been trying to bottom and fathom-I have some difficulties. Nevertheless, he has ferreted away at his concerns, and it is right that we try to understand them to see if they can be answered. From what he said, I am not certain about the specific disaster that he sees occurring because of the proposed changes.
	I reiterate things as I see them. Clearly, we are being presented with two different types of charity. There is the registered charity, which, as everyone knows, has the Charity Commission umbrella. That umbrella gives comfort to trustees of charities. They know year by year, or when they make any requests of the Charity Commission, that they are on the right lines-assuming that they are. It also gives comfort to everyone else in the land to know that that umbrella is there. We then have the exempt charities. The reason that we are here is that they have not had that umbrella. Under the regulations, they will be lent the Charity Commission umbrella. The Charity Commission will take it back unto itself only if there are severe problems that need real investigation.
	Movement between the regimes is clearly suggested in the instruments, but the result is that exempt charities will be regulated with only one relationship. It seems to me that having only the one relationship with the Secretary of State, rather than also having an additional relationship, ought to be helpful and simplifying.
	I have a specific question. Under the regulations is the role of the responsible person, who is the new regulator. Can the Minister confirm that the only new responsibilities of that responsible person are to cover the Charity Commission-type responsibilities, and that they do not bring with them any further form of interference that the trustees may not welcome?
	I listened carefully to the noble Viscount talk about the organisations and friends he belonged to. I should have thought that they would be under the Charity Commission. It seems to me that no one would be in that position unless there was a present relationship with the department. They have no other business to be there. The reason is that the department has a relationship with them, and it is sensible to lend to them the Charity Commissioner's relationship so that there is not another set of relationships, further accounts to be sent in, and so on.
	It is important that the regulations are agreed, in the sense that it is always important for the public to understand that charities are properly and clearly regulated. We only need one hiccup with a charity to affect other charities which have nothing to do with it with regard to the confidence that people have when giving money to charities and having a real understanding as to what charitable activity is. I believe, therefore, that these regulations will give further comfort in that the charitable sector-both the exempt and the registered charities-has the formal backstop of the Charity Commission, and I am happy to support the measures that have been put forward today.

Lord Bates: My Lords, as I rise to speak to these measures and also to the Motion before us, I put on record my charitable interests which are listed in the Register, although they are not specifically related to the organisations mentioned here.
	I thank the Minister for the thorough and comprehensive way in which she presented the case for the proposals to the House, for the assistance of her team and also for helping us to understand some of the details and the workings of these measures. I also pay tribute to my noble friend Lord Eccles for his efforts and research in this area and I support him in his forensic analysis of the instruments before the House. Indeed, I venture to suggest that his expertise in this field, not only in terms of parliamentary draftsmanship, regulation and operation but also in charities as a whole, has helped all sides of the House in understanding the true nature, impact and reach of the measures before us. We have explored already the need for better consultation and the Government would do well to consult with my noble friend in these matters as often as possible as he clearly has significant expertise.
	I, too, have some reservations in regard to the processes of the regulation and the potential conflict of interest. I will mention these briefly as they have already been expressed by other speakers. But before I do it would be remiss of me if I did not put on record the admiration we have on all sides of the House for the charitable sector in this country and the enormous contribution it makes to the social capital of this nation. The British public can always be counted on to respond generously to the needs of others. We are one of the most generous and giving countries in the world and that makes me very proud. Even in the depths of the recession last year, people gave £10 billion to charitable causes, down just £1 billion from the previous peak.
	The current response to the Disasters Emergency Committee appeal in Haiti has already produced £31.5 million, with £25 million given in one week. There is also the wonderful story of that seven year-old boy, Charlie Simpson, who went on a bike ride to raise £155,000. This is a hugely important sector. It is part of who we are and everybody who is involved in it needs appropriate tribute paid to their efforts. It behoves us, therefore, as has already been said, that this extraordinary generosity is underpinned with robust regulation of the way in which these funds are managed and spent so that confidence can be retained by the British public in the charities they give to.
	My first question refers to the Explanatory Memorandum and the results of the consultation. Under the Government's own initiatives in the better regulation proposals, legislation has to pass a 12-week consultation period. This has not taken place in this case. The consultation can sometimes be used by this Government as a kind of warm, inclusive phrase devoid of any real meaning and which has little or no influence on the eventual regulation itself. We can produce better regulation only if we engage substantively and meaningfully with those who have a better understanding, better experience and better knowledge of the legislation under consideration.
	These instruments act in the public interest. It is the public whom we should seek to protect, and many stakeholders will be affected by this decision. I therefore wonder why the formal public consultation has been rejected in this context. Will the Minister explain that when she responds? This is especially important as there have been murmurs from those in the field that these government proposals are not wholly agreed with, despite evidence to the contrary. I do not have all the evidence. It is not presented because there has not been the degree of consultation that perhaps there should have been.
	The arguments about funding arrangements have been technical, and I have been trying to think how they might be represented in a scenario. I ask the Minister to bear with me for a second while I present the scenario of the board of the British Library. I happen to be a passionate believer that the moment cannot come soon enough when the Lindisfarne Gospels, which were stolen from Durham Cathedral during the dissolution of the monasteries-by the Clerk of the Parliaments-and then sold for pecuniary gain to the British Library, are returned forthwith to their home with the great St Cuthbert in Durham Cathedral. That passionate belief is shared by a number of Members of this House. The noble Baroness, Lady Quin, has been very involved in this campaign, as has the noble Lord, Lord Foster. Should one of us at some stage in the future happen to become Secretary of State for Culture, Media and Sport and still hold passionately that that egregious error should be corrected at the earliest possible opportunity, as the principal regulator of the British Library, could not pressure be brought to bear on the situation? That might be a hopeful scenario.
	My noble friend Lord Eccles talked about independence and sailing close to the wind in the context of new Section 1A(4) in Section 6(1) of the Charities Act. Surely no one would want to enact legislation that threatened or even steadily eroded the integrity of charities by creating a system that confused the public or caused anomalies. The evidence that has been presented suggests that the order and the regulations could do just that, so there might be a case for further reflection and thought on the questions that have been asked and the points that have been raised. I very much look forward to the Minister's response to this debate.

Baroness Crawley: My Lords, I think we would all agree that this has been a very interesting debate. We have had the benefit of the very great experience of the noble Viscount, Lord Eccles, in the charities sector. His CV is a bit like a Who's Who of the charities sector, and the debate has been fascinating in that sense.
	I thank noble Lords around the House, particularly my noble friend Lady Pitkeathley, for the support that has been given in principle to the order and the regulations, with certain caveats; I was quite rightly asked certain questions to which I have been asked to respond.
	I may be able to give the noble Viscount, Lord Eccles, some comfort on the Friends of the British Library, which he mentioned. I would like to provide further assurances to the noble Viscount. I know that he has concerns about the impact of the instruments on charities which are connected to exempt charities. With the exemption of charities connected to the British Library, these statutory instruments will not change the exempt or registered status of any charities connected to or associated with other exempt charities. For example, the Foundation and Friends of the Royal Botanic Gardens, Kew, a registered charity, will be unaffected by these instruments and will remain a registered charity under the Charity Commission's regulatory supervision. Charities which are exempt because they are connected to an exempt charity will remain exempt. Like their parent exempt charities, they will come under the relevant principal regulator.
	Regulation 2 of the principal regulator regulations in no way extends the scope of the definition of a connected charity. That definition is in paragraph (w) of Schedule 2 of the Charities Act 1993 and remains unchanged. Whether a charity falls within that definition is entirely a matter of charity law and company law is not relevant in this context. For connected charities that are currently exempt by virtue of paragraph (w) of Schedule 2, Regulation 2 of the principal regulations simply ensures that they come under the same principal regulator as their parent exempt charities.
	I know that the noble Lord is concerned about the status of the Friends of the British Library, which is a registered charity. The view of the Charity Commission is that if it is governed independently from the British Library Board and therefore able to make its own decisions about what projects and activities it will fund or support, it will not become exempt and will still be required to be registered separately with the commission. It is not clear which of any of the British Library Board's associated charities would be caught by the connected charity definition. The Charity Commission has said that it would be prepared to work with the British Library Board and its associated charities, including the friends, if asked to, to identify whether any of the associated charities would become exempt by virtue of their connection to the British Library Board and identify options for the relevant charities going forward.
	If a charity associated with the board would become exempt by virtue of the order in front of us and the charity's trustees felt that this should not be the case, the commission could consider the circumstances further and advise the trustees and, if appropriate, the board about what steps they might take to clarify the independence of the charity concerned. Tonight, I want to go further and say that in order to allow more time for this consideration to take place, we would put commencement of these provisions back from 1 April-the planned commencement date-to 1 June 2010, so that further consideration can take place. I hope that that has given some comfort to the noble Viscount, Lord Eccles.
	I turn to some of the points raised by the noble Viscount and other noble Lords. The noble Viscount asked about advice and comment from the Charity Commission on these orders and about infringing the commission's independence. The commission and the Government have worked together to develop the Charities Act and subsequent secondary legislation. The commission has shaped and informed this legislation and fully supports the draft SIs being considered, as it has indicated to several noble Lords present with its briefing.
	The noble Viscount and the noble Lord, Lord Bates, referred to what they consider to be insufficient consultation. They asked why there has been no public consultation on who the principal regulators will be. The strategy unit first proposed the principal regulatory regime, or main regulator, as it was put then, in its 2002 report, Private Action, Public Benefit following public consultation. The Government accepted the recommendation and set about discussions with the various groups of charities likely to be affected. The aim of the discussions was to identify whether a suitable principal regulator existed for those relevant exempt charities.
	The outcome of these discussions was published in May 2004 in the regulatory impact assessment that accompanied the draft Charities Bill. The Bill itself had pre-legislative scrutiny and it was then subject to parliamentary scrutiny during its passage through Parliament. During that time there were discussions about the exempt charities provision. Most of the concerns raised in the debate about the exempt charities provisions were seeking to minimise the burden of regulation of exempt charities. Discussions still continue right through from before the passage of the Act in 2006 until now, with the proposed principal regulators and representative bodies of the exempt charities. I take the point made by the noble Viscount that some of this has been private discussion, not necessarily in the public domain, but I am trying to give a linear example of the public discussion in 2002 right through to continuing discussion with those charities that may be affected by these orders.
	There is no statutory requirement for requirement for consultation. We have, as I said, consulted the relevant charities directly and the proposed principal regulators. The bodies representing these charities and the principal regulators have said that they are content with the proposals.
	The noble Viscount asked why there was no impact assessment specifically on the orders before the House today. An impact assessment was published alongside the draft Charities Bill in May 2004 and updated as necessary when the Bill was introduced into Parliament. That impact assessment considered the costs and benefits of appointing principal regulators and listed the proposed principal regulators for each group of exempt charities where one had been identified, including for example, the Secretary of State for Culture, Media and Sport for that department's sponsored exempt charities. We accept that the original impact assessment could not provide the detailed costs of all aspects of the proposals, and therefore included in the Explanatory Memorandum to these statutory instruments is more information about the likely costs that will apply. We did not consider that there will be any significant costs for charities that remain exempt subject to a principal regulator. There will be additional costs for those charities that cease to be exempt and, where possible, we have set out those costs and the costs that we expect.
	The noble Viscount also asked whether the commission has experience of regulating colleges as in Oxford and Cambridge. I take his point about the intricate, detailed and complex systems that can be set up in colleges of great history, as those are. The commission regulates 180,000 registered charities that are hugely diverse in terms of size, legal framework and purpose. We have more than 40 years' experience of this and we are in dialogue with these colleges to enable a smooth transition to being registered, providing advice and support when needed.
	The noble Viscount and the noble Lord, Lord Bates-with special reference in the case of the noble Lord to St Cuthbert-talked about the inherent conflict of interest between the role of the department and the Secretary of State as a funder, and that of principal regulator, and asked whether there be a circumstance when the duty of promoting charitable law compliance could tip over if the Secretary of State was passionate enough. We considered this carefully with the proposed principal regulators and concluded that the principal regulator role can coexist with the funding role. We do not believe that there is an inherent conflict of interest between the role of funder and that of promoting compliance with charity law. If a conflict were to arise, we consider that it could be identified and managed within the department, and a fallback position would be to call upon the Charity Commission for its input.
	The noble Viscount, Lord Eccles, talked about the independence of the Charity Commission. It was an independent non-ministerial department before the Charities Act 2006, which reinforced its independence. It has been involved in the development of both the Charities Act and its secondary legislation and fully supports them. My noble friend Lady Pitkeathley, whom I thank for her contribution, asked some important questions about "right touch" legislation and gave us the benefit of her experience. I agree strongly with her conclusions.
	I thank the noble Lord, Lord Shutt, for his support for these statutory instruments. He spoke of how important it is to simplify the procedures for charities as much as possible so that they do not have to complete two sets of accounts and write two annual reports. He asked whether Ministers who act as principal regulators would be able to interfere with the running of their exempt charities. I reassure him that these instruments do not confer any powers on principal regulators that would enable them to interfere with the administration of the exempt charities for which they are responsible. The only duty imposed on a principal regulator is to promote its exempt charity's compliance with charity law.
	I thank the noble Lord, Lord Bates, who rightly spoke of the wonderful and extraordinary generosity of the British public and the tremendous work of the charity sector. He made the point quite movingly that, in a time of deep recession and when people's backs are against the wall, there has still been an enormous outpouring of charitable giving. The noble Viscount, Lord Eccles, and the noble Lord, Lord Bates, talked about conflict of interest. I hope that I have covered that.
	With those remarks, perhaps I may say in conclusion that it has been over six years since the Government accepted the Strategy Unit's recommendations relating to exempt charities. We now need to make progress with the implementation of these provisions of the Charities Act 2006 on which there has been much debate over several years. The Charity Commission is ready, the principal regulators are ready and the exempt charities that will be affected by these instruments are ready. We have committed to further work with the British Library Board and the charities connected with it before these instruments come into force. I hope that this gives the noble Viscount the assurances that he is looking for. I am confident that these changes will improve the regulation of exempt charities as charities in a way that meets the criteria of best regulatory practice and avoids excessive regulation.
	Motion agreed.

Charities Act 2006 (Principal Regulators of Exempt Charities) Regulations 2010

First Report Joint Committee Statutory Instruments.

Motion to Approve

Moved By Baroness Crawley
	To move that the draft Regulations laid before the House on 18 November 2009 be approved.
	Relevant Document: First Report from the Joint Committee on Statutory Instruments.
	Motion agreed.

Charities Act 2006
	 — 
	Motion to Withdraw

Tabled By Viscount Eccles
	To resolve that this House calls upon Her Majesty's Government to withdraw the draft Charities Act 2006 (Changes in Exempt Charities) Order 2010 and the draft Charities Act 2006 (Principal Regulators of Exempt Charities) Regulations 2010 because it has not been demonstrated how they fully accord with the Charities Act 2006 and with the principles of the Better Regulation agenda.

Viscount Eccles: My Lords, I will be very brief. I am grateful for the contributions made to this debate and I am sure that we shall return to the matter of process and the question of a more elegant solution to some of these issues. I thank the noble Baroness for her assurance that time will be given for the friends' organisations connected to these institutions to make sure that they have no problems between now and 1 June. If they read this debate and listen to the Charity Commission, that should give them plenty of time. I am extremely grateful for that.
	I entirely agree with the noble Baroness, Lady Pitkeathley, about the criteria. The only slight disagreement that I have with her is that I think that the Charity Commission fulfils every one of them excellently. This is why, as the House will recognise, I am a supporter of the removal of exemption and of the regulation of all charities moving to the Charity Commission so that there is no doubt left. My noble friend is entirely right on that point. It may be said that there will be no further intervention or interference by Secretaries of State, but all my past experience tells me that they cannot resist it.
	Motion not moved.

Digital Economy Bill [HL]

Bill Main Page
	Copy of the Bill
	Explanatory Notes
	Amendments
	2nd Report from the Delegated Powers Committee
	4th Report from the Delegated Powers Committee
	Committee (5th Day) (Continued)
	Amendment 214
	 Moved by Lord Lucas
	214: After Clause 17, insert the following new Clause-
	"Amendment of the Electronic Commerce (EC Directive) Regulations 2002
	(1) The Electronic Commerce (EC Directive) Regulations 2002 are amended as follows.
	(2) In regulation 2, after the definition of "the Treaty" insert-
	""wireless network" means an electronic communications network that uses wireless telegraphy, as defined in the Communications Act 2003."
	(3) In regulation 17, after paragraph 2 insert-
	"(3) This section shall apply to providers of wireless networks capable of delivering internet access, whether in return for consideration or otherwise."
	(4) After regulation 19 insert-
	"19A Search engines, hyperlinkers and aggregators
	(1) Where an information society service is provided which consists of the provision, creation or truncation of a hyperlink to content or activities provided by a recipient of the service, the service provider shall not be liable for damages of for any other pecuniary compensation or for any criminal sanction as a result of that storage where-
	(a) the service provider-
	(i) does not have actual knowledge of unlawful activity or information and, where a claim for damages is made, is not aware of facts or circumstances from which it would have been apparent to the service provider that the activity or information was unlawful; or
	(ii) upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information, and
	(b) the recipient of the service was not acting under the authority or control of the service provider.
	19B Non-commercial service providers
	For clarification, and for the purposes of regulations 17 to 19A, an "information society service" shall include a service provided for free where such a service is provided at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service.
	19C New forms of liability: transitional arrangements
	Regulations 17 to 19B shall apply from the day on which the Digital Economy Act 2010 is passed in relation to all forms of civil or criminal liability, whether or not such activity or content was illegal or actionable at the time of the coming into force of these regulations.""

Lord Lucas: My Lords, these provisions are all together in this amendment just because they would amend the same set of regulations. The first part I leave as a suggestion to the Minister as to one way in which he might seek to deal with the problem, which we have discussed before, of how libraries, internet cafes, Swindon and other such places might deal with the liability that the Bill potentially imposes on them.
	The second part takes a similar opportunity to clarify the potential liability of search engines, which, by the nature of their job, link to infringing materials that fall under the Bill. Nine European Union states currently provide an explicit exemption from liability for search engines. That does not include us. I think that it should.
	The third part clarifies the application of safe harbours in the e-commerce regulations to information services provided not for direct consideration-that is, search engines, social networking sites and public wi-fi services. Currently these qualify for protection only if normally provided for remuneration, which has caused a great deal of uncertainty. I do not see why such institutions should be discriminated against in favour of commercial business.
	Lastly, the fourth part of the amendment is intended to ensure that the safe harbour regulations in Regulations 17 to 19 apply to new criminal offences created after the regulations came into force. This would be an umbrella provision that would catch all future such criminal offences rather than their having to be provided for each time such a criminal offence was created. I beg to move.

Lord Young of Norwood Green: My Lords, this clause seeks to make significant changes to the implementation of the EU electronic commerce directive. This was not an issue that was covered in the Digital Britain report and, whatever the merits of these proposals, we do not believe that it would be appropriate to make such changes without consulting all interested parties.
	The amendment attempts to do a number of things. First, by the amendment to Regulation 17 of the e-commerce regulations that implement the directive, the regulations would specify that limitations of liability currently available to mere conduits should apply specifically to wireless networks-the noble Lord's new definition. I believe that the current term encompasses the noble Lord's new definition and that therefore this new provision is unnecessary and, indeed, would confuse the intention to deliver a wide interpretation of the networks to be covered.
	Secondly, the amendment would specify that the limitations on liability should apply to search engines, hyperlinkers and aggregators. The Department for Business, Innovation and Skills, in an earlier incarnation, consulted on the possibility of amending the regulations to make it clear that these activities were subject to the limitations of liability granted by the directive. The result of that consultation was that there was not a strong case that we should do so. We believe that it would be wrong to make these changes now without further consultation with all relevant stakeholders.
	Thirdly, I note that the next proposed amendment is designed to clarify the scope of the regulations to cover non-commercial services. While the main thrust of the directive is to harmonise the regulation of those services provided for remuneration, it is clear from the recitals to the directive that the scope of the directive covers a wide range of economic activities extending to services for which the recipient does not pay, such as online information. I refer noble Lords to Recitals 17 and 18 of the directive. I understand that there are cases before the European Court that will help to refine the scope of the directive. It would be rash to consider such amendments while such cases are in train and before the court has reached its conclusion.
	Lastly, the amendment would give prospective effect to the limitation of liability in the directive. That means that the limitation should be applied to all future legislation, not simply to legislation that had been enacted before the regulations came into force in 2002. This aspect of the implementation of the electronic commerce directive has been the subject of much discussion with the industry. There are attractions to the idea of prospective effect but also merits to the industry of the approach that we have adopted of creating bespoke implementation of the limitation of liability, which is specific to the legislation in question. Moreover, we have serious concerns about the danger of unintended consequences and the potential uncertainty of prospective effect. I hope that the noble Lord will consider withdrawing his amendment in the light of that explanation.

The Earl of Erroll: This is a prime example of exactly why we need properly to revisit the Copyright, Designs and Patents Act 1988 for a full parliamentary discussion about the Act's ambit and how it should cover things in a digital age. I see why the Minister does not necessarily want to put this into the Bill, but it is something that should be addressed.

Lord Lucas: It is wonderful the way in which some things, particularly little things, take a lot of consultation while Clause 17 can be invented on a whim; it did not seem to appear anywhere in Digital Britain when I read it. However, I have received a satisfactory answer to my amendment and I beg leave to withdraw it.
	Amendment 214 withdrawn.
	Amendment 214ZA
	 Moved by Lord Howard of Rising
	214ZA: After Clause 17, insert the following new Clause-
	"Right to bring action
	Nothing in any procedure provided for in sections 4 to 17 shall prejudice the ability of an individual author or, as the case may be, performer to bring an action for breach of copyright or a moral right, nor to recover costs in such actions."

Lord Howard of Rising: My Lords, I move the amendment in the name of my noble friend Lord Bridgeman. These provisions should certainly not be taken to prejudice the right to bring legal action. I hope that they will reduce the need to bring such actions, but that is not the same thing as impeding or preventing legal action. I would welcome any reassurances that the Minister could give the Committee on this subject.

Lord Davies of Oldham: My Lords, I am sorry that the noble Viscount, Lord Bridgeman, is not here to move the amendment himself as he and I were on the point of discussions about the issues that concern him. He had obviously not anticipated the extraordinary and most welcome progress that we have made, thanks to co-operation on all sides of the Committee today.
	The answer to the amendment is that I can give assurances. We understand the concern and it is right for us to be reminded that in the part of the Bill that deals with copyright owners, internet service providers and subscribers, we should not forget the people who create material in the first place, whether they be photographers, musicians or film-makers. Of course these creative people have rights and may be copyright owners. It would be fair to say that the focus of the provisions in these clauses is on the investors in copyright, the creative industries, rather than on the creators themselves. I am sure, though, that we recognise that the whole structure of the creative economy is founded in large part on individual creativity.
	I reassure the noble Lord, and I hope that he will take these reassurances back to his noble friend, that there is and can be nothing in this part of the Bill that would prejudice the rights of authors and performers in the way described. If an author or performer is also a copyright owner, their ability to protect their copyright will be enhanced, not restricted, by these provisions. They will not affect any contractual arrangements that they may have with their publishers. On moral rights, I assure the noble Lord that their current status and position will not be affected by these clauses, and we would in any case be constrained from doing so by European and international agreement. I hope that those reassurances will prove satisfactory.

Lord Howard of Rising: I thank the Minister for his remarks. I am very grateful for them. I beg leave to withdraw the amendment.
	Amendment 214ZA withdrawn.
	Clause 18 : Powers in relation to internet domain registries
	Amendment 214A
	 Moved by Lord Young of Norwood Green
	214A: Clause 18, page 19, line 12, leave out "an" and insert "a qualifying"

Lord Young of Norwood Green: My Lords, before speaking to these amendments I will say a few words about the Government's intentions regarding the powers contained in Clauses 18 to 20. The Government decided to seek these reserve powers because the domain names system is a crucial element of the internet economy. Domain name registries themselves have a key role in making sure that the system runs smoothly. Any disruptions could have adverse effects on business, consumers and internet users as a whole.
	For most people, the sort of disruption we have in mind manifests itself in the misuse of domain names. The domain names sector in the UK is self-regulated and it has worked well for many years. The Government's intention is that self-regulation by domain name registries should continue: we want to be absolutely clear about that. The reserve powers we are seeking in the Bill will enable the Government to intervene if things start to go wrong, with self-regulation clearly failing.
	The Government recently published a factsheet which I hope provided your Lordships with a bit more clarity on the circumstances in which the powers might be exercised. I know we will be covering the enforcement aspects of these powers when we examine Clauses 19 and 20, so for now I will not say anything more about this.
	I turn to the amendments in question. Following representations made by the industry, the Government realised that the scope of the domain name provisions in the Bill could have unintended consequences. Specifically, the definitions in Clause 18 as currently drafted would bring any organisation or company in the UK that runs its own name server within the scope of the powers-that was not intended. Similarly, the UK-based domain name registry operations of some third countries are also caught. Again, that is not what the Government had in mind when they proposed this draft legislation.
	The effect of the amendments tabled by the Government is to restrict the scope of the powers to cover just those top-level domain registries where the domain is clearly UK-related. That is where, in the opinion of the Secretary of State, the last element of the domain name will cause internet users to believe there is a connection with the UK or part of the UK. In practice, this will include the existing ".uk" and ".gb" domains, and indeed any future proposals ICANN receives for new domains which it approves-such as ".london", or even ".britfishshops". I am sure noble Lords will well appreciate that the Government will certainly be concerned about any phishing activities, if you will pardon the pun, associated with this domain. I see that joke went down really well. You can't win them all, as someone once said.
	Finally, the Government have tabled a minor amendment, Amendment 223C, to the definition of an internet domain registry so that the text correctly refers to "internet protocol addresses". This is definitely one for the cognoscenti. I do not think this requires further explanation. I beg to move.

The Earl of Erroll: I am quite involved in this world and I probably ought to redeclare something I declared earlier in the Committee stage. I have been sitting on the Nominet policy advisory body for a number of years. I do not receive any remuneration for it so I have no financial interest in this at all, but I have been involved in many of the discussions around this area. I can see exactly what the Government are getting at. Just as they made a general comment at the start, I should like to make the following general comment. I can see exactly why the Government want to take these reserve powers. I, too, regard the .UK domain name as a UKplc asset. I am not sure that we would have ended up with the governance structure that we have if we had realised way back, when this was all set up under an exchange of letters with ICANN, that the internet would become so important. I welcome the Government's provisions in this area. The amendments that I have tabled seek to make them either more flexible or to tweak them very slightly. They do not seek to alter the Government's basic intention. Therefore, I welcome this set of amendments. I was concerned that someone who was with a registry that had nothing to do with the UK might be caught up by this. Therefore, I think that this is a very sensible set of amendments.
	It is probably worth flagging up that certain issues may arise. For instance, I believe that proposals have been floated to have a .Scot top-level domain. The question arises whether that concerns Scotland or the worldwide Scottish diaspora. We can have a hefty argument about which it concerns. However, .Scotland would clearly relate to a part of the UK. The same would apply to .Cymru, .Wales and .Welsh. Therefore, arguments could arise in the future about the finer points of this. I like the idea of .fishshops. Would "sh" appear twice in the middle, or not? There is a phishing opportunity there.

Lord Clement-Jones: My Lords, the government amendments were welcome, but I want to clarify the position. Certain domain registries-I think particularly of Telnic-expressed in correspondence their concern about the width of Clause 18. I want to tease out from the Minister information about the .tel domain, which is a London-based registry operator but provides a global service to citizens and businesses of all nations under the .tel domain name. I suspect that that is exactly what the government amendments are designed to exclude, so that the measure will deal just with .UK and .GB. However, it is extremely important that that is clarified. By the same token, it is interesting to ask, what control or influence do the Government have in other respects? There is what is called a geo domain, .tv suffix, which causes some frustration among those who would like to see it being a much more effective way for localities to signpost what they have in their areas. However, it is a much abused domain name. I suspect that the Minister will almost reassure me that the Government have no control over those .tv domains because a different registry deals with those geo domains. The Minister looks somewhat puzzled, but some clarity in all this would be enormously helpful.

Lord De Mauley: My Lords, I thank the Minister for tabling these amendments. However, as the noble Lord, Lord Clement-Jones, said, concern has been expressed to us, and no doubt to other noble Lords, about the potential for these powers to be applied to all domains, not just the t.UK domain, and perhaps some of the other domains to which the Minister has referred, for which they were intended. The purpose of our Amendment 225BA is rather in line with that of the noble Earl, Lord Erroll; namely, to probe the Government to establish just how wide the new drafting could be taken to be read. There is still concern that the words "UK-related", as used at line 13 of government Amendment 225B, could be understood by some intent on stretching these provisions to their maximum, as meaning any registry, with however loose a connection with the UK. The government amendment uses the words,
	"connected with the United Kingdom".
	I suspect that this goes rather wider than the Minister intends. Will he consider improving the drafting to make the measure clearer? I see the difficulty, but spreading the jurisdiction too wide, either intentionally or, indeed, unintentionally, could, we suggest, create some unforeseen problems. He, of course, has at his disposal officials with formidable drafting skills.

Lord Young of Norwood Green: My Lords, I thank the noble Earl, Lord Erroll, for his constructive comments. We know what he says about .scotland. The noble Lord, Lord Clement-Jones, sought confirmation about whether we would be covering .tel. The answer is no. The domain .tv is not covered either.
	I am grateful to the noble Lord, Lord De Mauley, for tabling the amendment. As I understand it, the intention behind the amendment is to remove the definition of what is meant by a UK-related domain. As I have just explained, this wording has been proposed so that it is clear-UK-based registries of other country code domains are not covered by the powers.
	The definition will provide necessary common-sense clarity to the industry as to what might be considered UK-related and will ensure that the powers will only be available to the Secretary of State if internet users are likely to believe that a domain has a connection to the UK.
	Amendment 214A agreed.
	Amendment 215
	 Moved by Lord De Mauley
	215: Clause 18, page 19, line 16, after "period" insert "of not less than three months"

Lord De Mauley: My Lords, Amendment 215 is a very simple one. Its purpose is to ensure that if a notice has been received by a registry it will have a reasonable length of time to prepare and make representations to the Secretary of State. The effect of being given this reasonable length of time, combined with the threat of government intervention might well prod the registry into taking steps to put things right, thereby saving much trouble and expense. I beg to move.

Lord Davies of Oldham: My Lords, we are fully aware of the need to give a domain name registry enough time to consider properly any notification by the Secretary of State of serious failure by the registry and to formulate any representations it wishes to make to the Secretary of State. I am therefore grateful to the noble Lord for giving me the opportunity of clarifying the position.
	In practice, a registry will have been well aware that the Government were concerned about a serious failure of that registry long before receipt of formal notification by the Secretary of State. Informal approaches to the registry will have been attempted and exhausted before any decision to exercise these powers. Furthermore, before the Secretary of State can notify a registry of a serious failure he must have prescribed the specific practice or requirement that constitutes a failure. In the normal course of events, a full consultation will have taken place prior to prescribing practices or requirements under Section 124N(3). Therefore the registry should be well aware of the serious failure long before it receives a notification from the Secretary of State.
	Noble Lords will understand that a serious failure of a registry will need to be addressed as soon as possible. We do not want to restrict the ability of the Secretary of State to stipulate a period of less than three months for a registry to make representations where the circumstances are such that a shorter period is warranted. The Secretary of State must of course act reasonably in setting the period for representations, taking into account all relevant circumstances. I hope the noble Lord will recognise that he raises an important point but safeguards are there and notification will be adequate. Therefore, I ask him to withdraw his amendment.

Lord De Mauley: My Lords, I am grateful to the Minister for his response. I would like to think a little further on it. For this evening, I beg leave to withdraw the amendment.
	Amendment 215 withdrawn.
	Amendment 215A
	 Moved by Lord Davies of Oldham
	215A: Clause 18, page 19, line 18, leave out "an" and insert "a qualifying"
	Amendment 215A agreed.
	Amendment 216
	 Moved by Lord Lucas
	216: Clause 18, page 19, line 21, after "names," insert-
	"( ) the registry, having the powers and resources to do so, has failed to take effective action to end these practices,"

Lord Lucas: I shall speak also to Amendment 217. I thoroughly support the Government's proposals in general, but I wanted to make sure that what the domain name registry is being asked to do lies within its powers. Many companies would like to acquire other people's internet property. I do not know why one should give them the scope to lobby the Government to try to bully other people out of stuff that they legitimately own. Trying to make the domain name registry a creature of government would be a first step in that. Big commercial interests could then continue the pressure on the Government to try to get their way with internet domain name property. It seems to be plain sense that the Government should be able to require the registry only to do things that it has the power and resources to do.
	Having looked at this issue and the impact assessment, I think that the Government are missing a trick. Why have they not thought of taxation as a means of controlling some of these abuses? If they are worried about people hoarding domain names, why not tax them? There are 8 million of them out there. The Government could get a tidy sum and would make life inconvenient for people who hoard domain names on the ground that they think that they could make a profit out of selling names to people with a commercial use for them. Like the number plates business, there is a pretty good business in prestigious domain names. This Government have proved to be very inventive in that sphere. Two of the three ills that the Government complain of could easily be dealt with by constructive taxation which would have added benefits for them. I beg to move.

The Earl of Erroll: My Lords, grouped with these sensible amendments, I have tabled alternative Amendment 218. It tries to achieve exactly the same purpose for exactly the same reasons. I do not mind which amendment is supported. Such a measure may be useful because it has to be remembered that the purpose of Clause 18 is to enable the Government to put in a manager under Clause 19; that is a drastic step to take. These are the trigger arrangements, and it is only reasonable that the registry has some control over what has gone wrong, because one could put in a manager who might do no better. It does not really matter, because if you do not have the power to do anything about whatever the issue is, you will need fast-track legislation to cure the problem-as we discussed previously. It might have been better to us a Henry VIII power here, rather than something else. Inserting an amendment with the word "reasonable" would ensure proportionality and reassure people. The effect would be exactly the same in the end. If the registry is misbehaving or not being competent, and a manager could do the job better, the Government would still have a reserve power to put in a manager under Clause 19.
	On the previous matter, I wish to check something. The country code ".tv" is the top-level domain of Tuvalu. That country has been sensible because it spotted a huge opportunity and has a deal with VeriSign which markets the code for other purposes. The country gets a large slice of money, because it receives the royalties. This is an idea for the Government if they could grab the right domain. On top of that, Tuvalu has reserved ".gov.tv" for its own use. There are a lot of business ideas that the Government could use instead of taxing us.

Lord Howard of Rising: My Lords, my speaking notes state that the suggestions of my noble friend and the noble Earl are very sensible. I have to tell the Committee that I am rather bowled over at the thought of suggesting to Her Majesty's Government yet another form of taxation, when they are already hard at it-particularly at a time when Gordon Brown wants me to write an enormous cheque before 31 January.
	It would be quite unfair to punish a registry for failing to undertake something it is unable, rather than unwilling, to do. There is already considerable disquiet among many at the idea that these provisions will nationalise the internet. I would welcome the reassurance which will be provided by these amendments that the Government will not be using this clause as a pretext for unnecessarily taking over a registry.

Lord Young of Norwood Green: My Lords, with regard to both amendments, what is being proposed by the noble Lord, Lord Lucas, and the noble Earl, Lord Erroll, is a further test of a relevant failure by an internet domain registry. The effect of both amendments is that a registry might be able to delay or avoid taking action by claiming it could do nothing about the prescribed unfair practices or misuse of domain names because it did not have the power, responsibility or resources. The amendment of the noble Earl, Lord Erroll, would leave the Secretary of State powerless to act where a registry had taken reasonable steps, even when those steps had entirely failed to sort things out.
	Let me reassure both the noble Earl and the noble Lord that the Government would not expect a registry to act beyond its powers to correct any failure that it could not reasonably address; for example, where that failure results from the actions of a third party over which it has no control. However, in our view, it is unlikely that a domain name registry would not have the authority and capability to suspend a domain name or take down a site using a domain name used by that registry if it was requested to do so by the relevant authorities because of the adverse effects on the interests of consumers. In practice, however, the Government will have attempted to have a discussion with the relevant registry about the problem that has caused concern long before the powers in this clause are exercised. Any real compliance difficulties faced by the registry will have to come to light during these discussions and, it is to be hoped, a way forward found to the satisfaction of both parties.
	I turn to the amendment of the noble Lord, Lord Lucas. The absence of adequate arrangements for dealing with complaints by an internet domain registry is one of the two tests that decide whether there has been a relevant failure by that registry. While we regard it as important that such arrangements exist, we realise the form they take will depend on the registry concerned. As I have already explained, if we were concerned there might be a serious failure the Government would have had discussions with the registry to determine whether its arrangements for handling complaints were adequate before-and I stress before-exercising powers in this clause. These discussions will enable the Government to understand what, if any, barriers the registry faces in having adequate arrangements for handling complaints and to try to reach a solution satisfactory to both parties. Using the powers really will be a last resort. However, if abuses are damaging our internet economy, the Government should not be prevented from using these powers because the registry does not have the resources or powers to comply with prescribed requirements.
	I was as shocked as the noble Lord, Lord Howard, at the idea of taxing domain names. The idea of the Opposition Benches proposing more taxes for the Government is an interesting one that we will take away and raise with the Chancellor. I was reassured that it was not described as a "stealth tax". As for Henry VIII powers, we have dabbled enough in that already-I see the Lib Dem Benches concur. In the light of my explanation, I trust that the noble Lord will feel able to withdraw the amendment.

Lord Lucas: My Lords, I am grateful for that explanation. I will read it carefully along with the noble Lord's replies to the few groups that follow. It is important that there should be a real disincentive to the Government deciding to trip this trigger and take over a domain name registry. I will look at this as a whole to understand whether I think the Government have achieved that. As for a tax, it is a tax only as a secondary effect. The real purpose is to improve the fluidity of the domain name market; the Government will just happen to earn some revenue from it. It might also help to reduce my noble friend's tax bill in compensation. I beg leave to withdraw the amendment.
	Amendment 216 withdrawn.
	Amendment 217 not moved.
	Amendment 218
	 Tabled by The Earl of Erroll
	218: Clause 18, page 19, line 24, at end insert ", and
	"( ) the failure is an issue reasonably within the responsibilty of the registry and the registry has not taken reasonable steps to respond to this failure"

The Earl of Erroll: I will just say that I was not too serious about the Henry VIII idea: I just thought that the Government might have been over-tempted.
	Amendment 218 not moved.
	Amendment 219
	 Moved by Lord De Mauley
	219: Clause 18, page 19, line 25, at end insert "seriously"

Lord De Mauley: My Lords, we come now to another threshold. I was glad to see the qualifier "serious" in subsection (1) of new Section 124N, but was baffled to see it absent from subsection (4). It appears that any adverse effect, no matter how trivial, counts as serious if it relates to electronic communications or consumers. I cannot believe that this is the intention of the Government, and would therefore strongly recommend that the Minister clears up the confusion by accepting Amendments 219 and 220. I beg to move.

Lord Young of Norwood Green: I am grateful to the noble Lord, Lord De Mauley, for tabling the amendment. What we are talking about here is the degree to which businesses, consumers or the UK's internet economy must be affected before the Secretary of State can be satisfied that enforcement action against a registry would be justified. The Secretary of State is bound to act reasonably whenever he makes a decision. Deciding whether the failure of the domain registry is serious enough to warrant further action would not be an exception; and as we have said, neither is it a decision that would be taken lightly. It would be the last resort. It must remain within the Secretary of State's reasonable judgment to decide, on the facts available, how serious the adverse effect is. In the light of that explanation, I invite the noble Lord to withdraw his amendment.

Lord Lucas: My Lords, I am not sure that that answers my noble friend's point. Perhaps he will differ, but I think that this word would go a long way towards allaying my concerns about this part of the Bill, and about the lightness of the trigger. The Minister is right that the Secretary of State will take the decision; but he ought to take it in the light of an improved clause, rather than of an open interpretation that the current wording might give rise to.

Lord De Mauley: My Lords, I thank the Minister for his response. Perhaps, in the light of my noble friend's intervention, he might like to give this matter further thought. For this evening, I beg leave to withdraw the amendment.
	Amendment 219 withdrawn.
	Amendment 220 not moved.
	Amendment 221
	 Moved by The Earl of Erroll
	221: Clause 18, page 19, line 31, at end insert-
	"( ) The Secretary of State must consult before deciding whether a relevant failure is serious, where the responsibility for this failure lies and what remedial action needs to be taken and by whom."

The Earl of Erroll: This is on the same subject: we probably should have grouped the amendments together. I thought it would be easier for the Minister if I kept this separate. It is another way of ensuring that the event is serious and not trivial. Amendments 221 and 225 make the point that the Secretary of State should consult to make sure that other people think that the matter is serious, and it is not just a case of the Minister getting a bit worried. Therefore, I support Amendment 224, which is grouped with the next two amendments and states that a draft order should be brought before the House. It is all connected, and intended to ensure that if this sort of thing happens, it is scrutinised properly and not just arbitrarily by the Secretary of State. I beg to move.

Lord De Mauley: My Lords, following on from the last group of amendments, I agree with the noble Earl, Lord Erroll, that consultation should be required before this power can be exercised. When we discussed Amendments 216, 217 and 218 a few minutes ago, my noble friend referred to disquiet at the possible overreaching powers of the Secretary of State. The Minister has, throughout Committee, been at pains to reassure us that there is no intention to abuse these powers. He used the words "last resort" when we debated that group. Nevertheless, these amendments would give some comfort to those who are worried.

Lord Young of Norwood Green: Again, I am grateful to the noble Earl, Lord Erroll, for tabling the amendment. The purpose of both amendments is to make it a requirement in the Bill for the Government to consult. The first amendment requires the Secretary of State to consult in order to establish whether the failure of a domain registry is serious such that he may have the power to take action against a registry, and to inform the decisions as to who is responsible for the failure, what action needs to be taken and by whom. The second amendment would impose a requirement in the Bill for the Secretary of State to consult before prescribing which practices are unfair or involve the misuse of domain names, and before prescribing the requirements to be placed on registries for dealing with domain name complaints.
	I give an assurance that we are committed to consultation with the stakeholders. A government code on consultation prescribes the form that consultation should take. We are fully supportive of consultation and are aware of its importance in the decision-making process. The Secretary of State can consider using his powers against a registry only if he is satisfied that the particular registry to which he would address a notification is engaging in a serious relevant failure that could harm the reputation or availability of electronic communication network services and the interests of consumers or members of the public.
	The Government have made a commitment to consult before the Secretary of State uses his powers. The degree of consultation requirements suggested by the noble Lord risks delaying action to the detriment of the very things that we are all seeking to protect. We believe that the necessary safeguard is already built into the process that we have set out and to which we are committed, including the consultation and prescribed practices and the opportunity for the registry to make representations to the Secretary of State further to being served with a notice. I hope that that explanation and the commitment to consultation will be sufficient to enable the noble Earl to withdraw the amendment.

The Earl of Erroll: I thank the Minister for that helpful answer. As the Government are so committed to consultation, I thought that it might be wiser to put this on the face of the Bill. As they are carrying out other consultations, it could run in parallel and I do not think that it would necessarily delay the process. It would make it clear that the Minister cannot operate unilaterally. With those reservations, I beg leave to withdraw the amendment.
	Amendment 221 withdrawn.
	Amendment 221A
	 Moved by Lord Davies of Oldham
	221A: Clause 18, page 19, line 33, leave out "an" and insert "a qualifying"
	Amendment 221A agreed.
	Amendment 221B
	 Moved by Lord Davies of Oldham
	221B: Clause 18, page 19, leave out lines 37 to 39

Baroness McIntosh of Hudnall: If Amendment 221B is agreed to, I cannot call Amendments 222 and 223 by reason of pre-emption.
	Amendment 221B agreed.
	Amendments 223A to 223C
	 Moved by Lord Davies of Oldham
	223A: Clause 18, page 19, line 40, at the beginning insert "qualifying"
	223B: Clause 18, page 19, line 41, leave out from "a" to "and" in line 42 and insert "relevant register of internet domain names"
	223C: Clause 18, page 20, line 3, leave out "portal" and insert "protocol"
	Amendments 223A to 223C agreed.
	Amendment 224
	 Moved by Lord Lucas
	224: Clause 18, page 20, line 6, after "State" insert "where any such regulations must be made by statutory instrument and may only be made if a draft order has been laid before Parliament and approved by a resolution of each House"

Lord Lucas: This amendment raises a separate point. It comes under the same heading of making the trigger a bit heavier on this mechanism and refers to the fact that these orders should be made by affirmative, rather than negative, resolution. I beg to move.

Baroness McIntosh of Hudnall: I have to inform the Committee that, if this amendment is agreed to, I cannot call Amendment 225 by reason of pre-emption.

The Earl of Erroll: As I said before, I thoroughly approve of this.

Lord Young of Norwood Green: The clause already requires the Secretary of State to set out what constitutes unacceptable practice by registries and explains how they must deal with complaints and regulations. The Communications Act requires that those regulations be made by statutory instrument, subject to the negative procedure. In practice, there is likely to be a consultation on the proposed regulations by the Government and Parliament will have an opportunity to annul them before they come into force, so all interested parties will be able to make their views known and so help to inform the Secretary of State's decision on whether to proceed further. If the regulations are made and approved, the registry will be notified and given a further opportunity to make representations to the Secretary of State before any enforcement action is taken.
	This amendment would require an additional parliamentary process before the Secretary of State could proceed in making the regulations. Although I am conscious of the intention behind the amendment, it would further delay the Secretary of State's ability to take action against a serious failure of a registry, which could be detrimental to the interests of UK consumers and businesses. We think that we have the balance right. In light of my explanation, I hope that the noble Lord will feel able to withdraw the amendment.

Lord Lucas: My Lords, as I said, I shall read with great interest all that the Minister said, and I beg leave to withdraw the amendment.
	Amendment 224 withdrawn.
	Amendment 225 not moved.
	Amendment 225A
	 Moved by Lord Davies of Oldham
	225A: Clause 18, page 20, line 7, leave out "an" and insert "a qualifying"
	Amendment 225A agreed.
	Amendment 225B
	 Moved by Lord Davies of Oldham
	225B: Clause 18, page 20, line 11, at end insert-
	""relevant register of internet domain names" means a register of-
	(a) the names of second level internet domains that form part of the same UK-related top level internet domain, or
	(b) the names of third level internet domains that form part of the same UK-related second level internet domain;
	"second level internet domain" means an internet domain indicated by the last two elements of an internet domain name;
	"third level internet domain" means an internet domain indicated by the last three elements of an internet domain name;
	"top level internet domain" means an internet domain indicated by the last element of an internet domain name.
	( ) An internet domain is "UK-related" if, in the opinion of the Secretary of State, the last element of its name is likely to cause users of the internet, or a class of such users, to believe that the domain and its sub-domains are connected with the United Kingdom or a part of the United Kingdom."
	Amendment 225BA, as an amendment to Amendment 225B, not moved.
	Amendment 225B agreed.
	Clause 18, as amended, agreed.
	House resumed.

House adjourned at 9.51 pm.